With London’s rental market on the turn, investors have a continued interest in buy-to-let properties in the capital. However, in a city as expansive and diverse as London, it can be difficult to know where you should invest.
Here’s everything you need to know about London’s 2018 buy-to-let market, including what to look for and where to look for it.
What should you look for?
When investing in a buy-to-let property it is of upmost importance that landlords research the area of interest and see what is has to offer. It is important to think about the property from a tenant’s point of view and you must look at aspects such as,
- Transport links and Parking
- Schools in the area
- Local amenities such as shops, parks, bars and restaurants
- Distance to universities and/or work hubs
With highs over 6%, East London holds some of the highest yields in the UK. Areas including Stratford and Upminster have rental yields of 5% upwards and Barking, Cranbrook and Little Heath are all over 6%.
Newham is also on the radar, and although the borough does not have the best reputation it is set to see continued rental growth over the next few years and is therefore a key area of interest for buy-to-let investors.
Stratford has also seen continued growth the area’s regeneration as a result of the London 2012 Olympics. The area boasts an average rental yield of 4.7% upwards which sits comfortably over the capitals average.
Ilford is also a great place to invest and is currently one of the top locations for capital gains (17.04%) in the whole of England.
Although not as profitable as East London and with rental yields down from 5.3% in 2017 to 4.8% South London may not be obvious top pick for buy-to-let investors. However, these figures are still well above the average for the capital and current changes may not be representative of long term trends.
Further south Bexley has some of the most affordable properties when compared to more central locations. Rental yields for many properties are over 6.8% and the area also boasts one of the lowest average house prices of any London borough at £371,996.
The boarders of the south London are also set to provide the high yields and although Bexley may be the on top, areas such as Little Etham, St Paul’s Cray and Foots Cray are all attractive with rental yields of up to 4.7%.
The Whyteleafe area is also set to do well in the next year with rental yields of 4.9% and towards the west, Thorton Heath and Wallington both have yields of up to 4.7%.
However, if you’re more interested in capital gains then Bromley is a key area to investigate. In 2018 the gains for properties in this area are set at 16.56%.
Moreover, West London is also a great area of interest if you’re after capital gains. Although return on investment may be lower than in other areas of London, property prices in the west have seen an impressive increase of 13.8% since 2010.
Merton, home of the sought-after Wimbledon Village, has been labelled as one of the best buy-to-let hotspots in the capital and has an expected rental growth of around 33.8% over the next three years.
Richmond-upon-Thames is also growing and although the area may be known for its expensive property prices, rental growth is expected at 33%.
Rental yields are also at a high, and like other many areas of London, it seems that the further out you go, the high the rental yield. Locations such as Hayes and Feltham all offer a yield that on average is over 5%.
With great transport links into the city and an established reputation it is no shock that a buy-to-let property in North London is a good investment. Although the area has high house prices, its disability also means high rental prices.
Islington is expected to see a 33.5% increase in rents over the next three years and its neighbour Camden is set for a similar level of growth at 32.1%.
Moreover, is you’re interested in capital gains then Enfield may be of interest. This area has the 4th highest capital gains in the United Kingdom at 16.97%. It also boasts some of the highest rental yields in North London with figures up to 5.7% expected in 2018.
Protect your Investments
Whether you invest in a buy-to-let property in central, north, east, south or west London, it is pivotal that you protect your investment.
Set the standard to which your property should be maintained and returned at the end of the tenancy with a comprehensive, detailed inventory report from Assist Inventories.
Assist Inventories offer property inventory services for landlords and agents who require the security of a robust property inventory report but lack the time to carry them out themselves.
Talk to us about how we can assist with your inventory reports leaving you free to ensure you are investing wisely and maintaining your portfolio.