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Where are London's best rental yields?

By Jan Moys

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Which boroughs offer the highest rental yields in London? We take a look at our own sales and rental data for the past year to find out where rental properties brought in the most income relative to purchase price. Invest wisely in 2020 with our guide to the ten areas generating the city's best rental yields.

1. Barking and Dagenham

Rental yield: 6.4%

This 2 bedroom Barking apartment on the 6th floor of the Springs Place development is on the market for £280,000

London's cheapest place to buy and rent property also provides the best rental yields in the city. With an average property price of just £268,263, property in the Borough of Barking and Dagenham has generated an average £329 pw rental income, giving a rental yield of 6.4%.

2. Merton

Rental yield: 6.3%

£475,000 buys this one bedroom apartment in the popular Chapman Square development in Wimbledon

Encompassing popular areas like Wimbledon and Colliers Wood, Merton offers widespread appeal to both tenants and landlords. Our figures show an average property price of £448,504 for January-December 2019, giving investors an average rental income of £545 pw – a 6.3% rental yield.

3. Sutton

Rental yield: 6.2%

This two bedroom terraced house in West Sutton is on the market for £400,000

An extremely popular area among families looking to upsize away from central London, Sutton also offers landlords a healthy return on investment. Average prices are low – just £323,444 – but with rents averaging at £385 pw, a yield of 6.2% provides an attractive prospect for landlords.

4. Redbridge

Rental yield: 6.2%

Four bedrooms and a spacious garden make this Ilford house perfect for families. Offered at £899,950

Just east of Walthamstow, Redbridge is another borough that offers families good value homes within an easy commute of central London. Prices are accessible, averaging at £339,063, while an average rental prices of £402 pw gives a healthy rental yield of 6.2%.

5. Guildford

Rental yield: 5.7%

This two bedroom flat in the pretty Guildford village of Send is on the market for £315,000

Leafy commuter town Guildford has been attracting Londoners for quite some time thanks to its wealth of green spaces, beautiful homes and excellent town centre. Compared with London, the average price of £354,245 offers outstanding value and the rental yield of 5.7% makes it well worth considering for landlords.

6. Harrow

Rental yield: 5.5%

£525,000 buys this spacious family home in South Harrow

Stanmore, Pinner and Harrow all offer renters excellent value properties with outstanding local amenities. Landlords considering buying in this borough will be attracted by the average purchase price of £368,791, offering an average rental yield of 5.5%.

7. Newham

Rental yield: 5.1%

This beautiful four bedroom Stratford home is on the market for £675,000

Stretching east from Stratford and southwards to cover Beckton and the area around the Excel Centre and London City Airport, Newham is currently enjoying major investment and widespread development works. An average property price of £421,081 and yields of 5.1% make this affordable east London borough a great choice for buyers seeking a solid investment with good prospects.

8. Haringey

Rental yield: 4.9%

This period conversion flat in Crouch End is on the market for £875,000

Immensely popular with London renters in their 20s, Haringey also offers outstanding areas for families, such as Crouch End and Muswell Hill. The higher average purchase price of £445,240 reflects its more central location and desirability, but rental yields of 4.9% offer a great return.

9. Woking

Rental yield: 4.8%

This two bedroom Woking apartment with stunning panoramic views is on sale for £550,000

Growing in popularity as a commuter option, Woking offers more square feet for your money than central London and no fewer than eight golf courses to choose between. A low average property price of £316,909 and rental price of £294 pw mean rental yields of 4.8% in this westerly commuter borough.

10. Enfield

Rental yield: 4.8%

Currently on the market for £585,000, this three bedroom detached house in Enfield offers excellent value

Another suburban location attracting more attention from renters in recent years is the northern borough of Enfield. Well-served by rail, Overground and Piccadilly line services, This area still commands a London premium, with an average sale price of £419,333 and attractive rental yields of 4.8%.

Click on the area names above for more properties in those boroughs, or click the pictures for more details on each featured property.

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