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Post Brexit Rental Market Update

July 28, 2016

It will come as good news to landlords that Britain’s decision to leave the EU last month has not rocked the rental market, and rental prices have remained fairly stable from May to July.

Interestingly, prime central London has even been given a Brexit boost; Kensington and Chelsea saw a monthly rental average increase from May to July of 0.4% and Westminster also saw a 1.7% rental increase.

The trendy East London borough of Tower Hamlets also saw a healthy 1.2% rental price increase from May to July, and savvy investors are still keen to snap up properties in hotspot areas created by infrastructure projects like Crossrail and Crossrail 2.

We’ve created a graph using our latest rental data, which shows the current, two bedroom average rental price per borough. We've also found the highest potential yields* in each London borough, so you can see where you can get the best return on your investment.

The results...

As the table shows, we’ve also used our Interactive Yield Map to drill down into specific areas, looking at postcode and even street level to find the highest potential yield in each London borough.

Outer London boroughs

On a whole, the outer London boroughs offer the highest yields but the lowest average monthly rental prices. The highest yield of 8.3% was found in the borough of Havering, in the popular but affordable Hornbridge area around Whybridge Junior School.

Barkingham and Dagenham, Bexley, Redbridge and Bromley also offer extremely strong > 6% yields.

We’re seeing an increasing number of London renters moving further out - particularly further East - to get more for their money. The desirable, suburban area of Chadwell Heath in Barking and Dagenham offers an impressive 7.6% yield, and its popularity will only increase when it will benefit from Crossrail in 2019. We also expect Romford, Manor Park, Ilford and Forest Gate to benefit hugely from Crossrail. Tenants in these areas will be able to enjoy affordable rental prices and a quick commute to and from London, and landlords can enjoy both high yields and a good prospect for capital growth.

Inner London boroughs

As for the inner London boroughs, if you’re chasing a high yield, the boroughs of Greenwich, Southwark and Tower Hamlets all offer healthy prospects. Southwark has shot up in popularity over the last year, thanks to extensive generation around the Shard and infrastructure improvements, yet it is still one of the most affordable inner London boroughs. The highest yield in the borough (5.5%) can be found in Peckham, on Commercial Way and Devon Street. As for Greenwich, the streets around North Greenwich station, including Pelton Road, Bellot Street, Blackwall Lane, Armitage Road and Millenium Way offer a high 6% yield, and in the borough of Tower Hamlets, the highest yields can be found near Canary Wharf Tube (4.8%), which will be the first Crossrail station to be constructed, and in trendy, affordable Whitechapel 5.2%.

Prime central London

As we mentioned earlier, rental prices in prime central London have had a boost post Brexit. But though rent prices are high, yields in prime central London are relatively low on a whole. A healthy 4.8% yield however can be found in Westminster on popular streets like Abbey Road, Clifton Hill and Carlton Hill in the desirable St. John’s Wood area. In Kensington and Chelsea, the highest yields (3.8%) can be found around the towering World's End Estate.

Click on our interactive yield map on the right to have a look for yourself and find out where you can get the best return on your investment.

If you want to know how much your property could achieve in rent, click here for an instant property valuation in 60 seconds, or give us a call on 0207 099 4000. Click here to find out about the lettings packages we offer.

Rental price figures updated 01/08/16.

*Potential investors should satisfy themselves that any property acquisition meets their requirements and should take independent professional advice regarding the achievability of the rental yield and the value of the property itself. Rental yields quoted here are statistical assessments taken from our Interactive Yield Map on 27/07/16. They are not guaranteed and may be lower if the property does not achieve continuous occupancy.

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