Which area of London has the highest rental yield?
Over the past 5 years, all 32 London boroughs (and particularly those in central London) have experienced substantial property price growth, fuelled by a combination of record levels of overseas investment and historically low interest rates.
Whilst it is true that the recent reduction in the availability of interest-only mortgages and increases in stamp duty for the most expensive properties may mean that this trend will not be sustained indefinitely, it is certainly the case that, at the moment at least, central London property prices are at an all time high.
However, whilst property prices have increased substantially, rental prices have broadly continued to track earnings growth. As a result, rental prices have not increased at the same rate as property prices and yields have steadily declined in central areas for at least the past five years that we have been tracking them.
Rental yields show substantial local variation
Whilst researching the subject for a seminar that we hosted in conjunction with the National Landlord’s Association in November, we discovered that the picture is slightly more complicated than we first expected. If you missed the seminar why not view our two minute Rental Yield Video.
Within boroughs, we discovered that there are certain postcodes that consistently perform substantially better than others. These localised hotspots are necessarily areas which are more attractive to renters than they are to potential purchasers. Anecdotally, we have found that ex-local authority properties with good public transport links often fall into this category. However what is even more interesting are the subtle differences between postcodes and even streets, so we developed a unique street level view of yields which updates with live data, to help landlords with their search for further investments.
If there is an area you want to investigate further then get in touch with one of our 11 estate agent offices who will be able to take you through our Buy-To-Let investment opportunities. Our estate agents are based throughout London in Acton, Battersea, Bloomsbury, Camden, Fulham, Hammersmith, Dulwich, Clapham, West Hampstead, Highbury, and Islington.
Want to know what your property is worth?
Our handy Instant Valuation will give you both a rental or sale valuation in any postcode in just 60 seconds. It's an ideal way to check that you're generating the correct level of rental income, or if you are thinking of selling, what your property might be worth.
On a daily basis, we analyse property prices from several hundred estate agents in London. We combine this instantaneous picture with data collected over the past 3 months and compare this against own internal company data, so that we have enough data to be able to make statistically reliable assessments of the median sale price against the median rental price for several different types of property.
We have approximately zones 1 - 6 covered in London, and we are slowly working our way out towards the M25. Where we don't have enough data to make a meaningful assessment, the map is blank. This doesn't happen often, but there are areas in the City (e.g. EC1 and EC2) where residential transaction volumes are particularly low and as a result where we can't produce a meaningful rental yield.
We have published our research here and update the data throughout the night, providing a real-time street-level rental yield map.
For press enquiries or for interviews with our Head of Research, please call Steve or Emma in our press office on 020 7428 5311.
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