- Tower Hamlets revealed as the best London borough for buy-to-let property, with the latest figures showing strong rental yields of 5.9%
- Southwark, Newham, Barking & Dagenham and Greenwich make up the rest of the top five boroughs, with rental yields well above the London average
- The highest-yielding boroughs have some of the lowest property prices in the capital, meaning a lower initial investment for buy-to-let landlords
New research has revealed the London boroughs where buy-to-let landlords currently looking to invest can generate the best returns.
Drawing on the latest house price and private rental data, property analysts at SBA Property Management have identified Tower Hamlets as the highest-yielding borough for rental returns.
With average property values of £456,375 and monthly rental costs of £2,244, the inner London borough offers buy-to-let investors yields of 5.9% — significantly higher than the London average at 4.81%.
Another area for investors to target is Southwark, which has average house prices of £476,177 and private rents of £2,219, yielding returns of 5.59%.
Other opportunity areas identified by SBA Property Management are Newham, Barking & Dagenham and Greenwich, offering average rental yields of 5.23%, 5.06% and 4.96% respectively.
The news comes shortly after interest rates were cut by the Bank of England for the first time since March 2020, setting the stage for mortgage costs to fall over the coming months. With further cuts forecast in 2025, property investors will be in an even stronger position to buy.
Habib Mogul, Director at SBA Property Management, commented: “After several years of uncertainty, London’s property market is again shaping up to be one of the UK’s most attractive investment opportunities. Falling mortgage costs and stable property prices combined with high demand for rental accommodation means buy-to-let property in particular offers great potential for returns.
“Historically, large deposits and borrowing costs have been a barrier for buy-to-let landlords looking to invest in the capital. However, our research shows that many of the highest-yielding areas are those with the lowest property prices, reducing the initial investment needed to secure a piece of London’s lucrative property market.”
Average house prices in the five boroughs identified by SBA Property Management are below the London average, with Barking & Dagenham and Newham being two of the three most affordable boroughs for property investors.
In Barking & Dagenham – the London borough with the cheapest house prices – buy-to-let landlords would only need £51,060 for a typical 15% deposit to start earning above-average returns on their investment.
Tim Darwall-Smith, Director at SBA Property Management, said: “In recent years, we’ve seen London’s property market buck the trend of rising house prices seen across the rest of the country. At the same time, rental costs in the capital have surged, putting buy-to-let landlords in an advantageous position.
“The easing of mortgage costs brings more relief to buy-to-let landlords, freeing up resources to make value-boosting renovations and deliver a better tenant experience. Ultimately, the investors with well-managed properties will be best placed to benefit from London’s highly profitable rental market.”
To find out more about SBA Property Management’s services, visit: https://sbaproperty.com/.
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