According to average sold prices and rental prices in 2016 from each of the offices in our 67-branch network, we can reveal where the highest rental yields are in London.
Read our 2020 update of the best rental yield in London.Stratford
Rental yield - 5.50%
Average sales price - £373,032
Average rental price - £394 per week
Research shows that Stratford tops the charts with the highest rental yields in London at 5.50% a year – a great example of why you should buy a property in east London right now.
Many investors are drawn to Stratford because of its lower than London average property prices and increasing demand for rental properties following large scale regeneration.
The area has undergone a major transformation in the last six years, stimulated by the 2012 Olympics. The building of Westfield Stratford and a large number of new homes and development projects have been drivers of increasing demand from both buy-to-let investors and the tenants they are letting their properties to.
Looking at the average renter in Stratford, this east London retail and transport hub is popular with professionals and students who are looking for convenient commuter links and easy access to a wide range of amenities. In turn, landlords are benefiting greatly from the high number of people searching for rental properties in the area.
Properties to buy in Stratford
Crystal Palace
Rental yield - 5.37%
Average sales price - £339,148
Average rental price - £350 per week
Next on the list is Crystal Palace, where rental yields are 5.37% a year.
And just like Stratford, Crystal Palace has benefited from a facelift over the past few years, which has increased interest from investors who are looking to profit from the ongoing improvement works to the area.
Part of these upgrades and one of the biggest fortunes for homebuyers and investors was the opening of the Overground in 2010. Connecting Crystal Palace with Canary Wharf and east London, renters can enjoy easy commutes to London’s financial centres, while Southern services serve routes to Clapham Junction, London Bridge and London Victoria.
With a range of rail links, renters have extended the boundaries of their property search to places like Crystal Palace, which offers the same commuter convenience as some areas that are closer to central London – but with lower average rental prices.
Reflecting the need for rental properties in the area, an increasing number of landlords have chosen to invest in Crystal Palace, benefiting from the widening appeal of the area while taking advantage of the affordable property prices.
Properties to buy in Crystal Palace
Pinner
Rental yield – 4.96%
Average sales price - £447,673
Average rental price - £427 per week
Third on the list of the highest rental yields in London is Pinner, where rental yields stand at 4.96%.
A residential area close to good schools and parkland, Pinner attracts different groups of renters, from professionals to families, and on the other side, investors keen to profit from the area’s established rental market.
While Metropolitan line services connect Pinner with the city in around 45 minutes, it is perfect for renters in search of a quieter place to live in the capital – for which there will always be a demand.
The property stock in Pinner ranges from small flats to large family homes, which are affordable on both sides of the coin. Renters can expect to pay between £900 and £1,200 for a one bedroom flat, while investors can buy the same properties for under £300,000 – and in some cases, the same price for two bedrooms.
Bromley
Rental yield – 4.93%
Average sales price - £362,372
Average rental price - £343 per week
According to Foxtons sold prices and rental prices in 2016, rental yields in Bromley are 4.93%.
Like Crystal Palace, landlords in Bromley have seen a rise in the number of tenants who are looking further afield for the perfect rental property, which is driving up rental prices – but also property values.
Part urban and part rural, the London Borough of Bromley sits on the outskirts of London. But a number of stations around Bromley’s centre provides services to London Victoria and south of London into Kent.
This meeting of suburban charm and transport convenience leverages Bromley as a great place to live for renters, while for investors, Bromley’s property prices are way below the London average of £531,900 and are therefore more appealing.
A combination of lower sales prices and solid rental prices driven by the high demand for rental properties, is the reason why rental yields in Bromley are so strong.
Wapping
Rental yield – 4.91%
Average sales price - £578,205
Average rental price - £546 per week
Wapping comes in last on this top five list, but only just. Rental yields in Wapping stand at 4.91%, which is a healthy yield in an area where property prices are above the London average.
A mainly residential area, sandwiched between Canary Wharf and the City, Wapping’s rental market has prospered greatly from its location and the demand from renters working in these financial districts.
While the average property price is much higher than any of the other areas featured on this list, Wapping benefits from a much more central London setting and the rental prices reflect this.
In places close to Wapping, such as Shadwell, property prices are more affordable. Here, you can buy a one bedroom flat between £300,000 and £350,000, whereas in the E1W postcode the property prices rise considerably.
But for a neighbourhood like Wapping, renters are willing to pay a premium for its location, which in turn attracts property investors to the area.
