With rents in the capital continuing to boom, we’ve taken a look into the best areas to buy-to-let in London. When we’re talking about buy-to-let hotspots, London cannot be ignored with impressive capital gains and unparalleled return on investment opportunities.
London which has never been in the Postcodes of Highest rental yields is still arguably the best city with it’s hubs to invest for buy-to-lets. We all accept that the midlands brings very attractive yields of 7-11%, but what about:
- Capital growth on your investment
- Ease of planning applications due to comparables on the same street
- High availability of quality tenants,
- Never ending interest from overseas investors
- The constant emergences of new developments that increases the quality of amenities
- Transport hubs, even Boris bikes are main reasons for locating
- Availability of employment
These are just some of the main reasons why London will outweigh even the higher yielding postcodes. Simply because do you want to just make 9% on your rent or 9% annually on your capital growth plus a healthy 5.5% in rental yields? I thought so.
In terms of overall best buy-to-let return, London is the standout part of the country to invest. With ever-soaring property prices, capital growth is – somewhat inevitably – far higher on average in London than anywhere else in the UK.
However, for those landlords in the capital not looking to sell their buy-to-let property any time soon, the good news is that fantastic rental yields are also available – providing you invest in one of the best buy-to-let spots in London.
In general, east and south London offer the highest yields, with west London performing well for capital gains. East London boasts some of the highest yields in the UK, with highs of over 7%. It can also lay claim to many of the best buy-to-let postcodes London has to offer.
Newham – a borough still suffering from a less-than-ideal reputation – is a particularly interesting area to invest. With Stratford’s vast regeneration ongoing since London 2012, the area has an average rental yield of 4.5 per cent or more, which is comfortably above the capital’s typical percentage.
Also in Newham, East Ham has the third highest return on investment percentage of any London area. Its 29.4 per cent ROI is calculated by looking at the average price of a two-bedroom flat, the annual asking price change and the average annual rental income for the area.
However, look a little further east in the likes of Rainham, Dagenham and Romford and you’ll be able to find more affordable property and average rental yields easily over 5.5 per cent.
It’s all good and well to know that there are 7-11% up north, but London provides a different mix, with a city as expansive and diverse as London, it can be tricky knowing where to look. Uncovering the next hidden gem takes research, local knowledge and more than a hint of luck.