An investigation from Simply Business has indicated that more than 70% of buy-to-let investors prioritise rents over capital gains when making purchase decisions.
Taking this into account, London based residential agent Portico has revealed which capital locations command the greatest rental yields.
Capital rental gains
The agent’s Interactive Yield Map has shown that the top-ten areas in London for highest rental yields are:
- Elm Park, Havering-Highest yield 8.5%
London’s greatest yield can be found in Elm Park in the east London borough of Havering. With rents increasing in the capital, a number of people are moving out of the city to the outskirts, in search of more affordable places to stay. Havering has seen a double-digit growth in the last year.
- Chadwell Heath, Barking & Dagenham –Highest yield 8%
Again in East London, Chadwell Heath offers a very good yield and prospects of growth. What’s more, it shares the honour of the only place alongside Havering to achieve double-digit growth in the last year.
The Crossrail will be ready for arrival at Chadwell Heath railway station in May 2017, driving a number of commuters to the region.
- Creekmouth, Barking & Dagenham-Highest Yield 6.8%
Despite being an industrial region, a yield of 6.8% is certainly not to be sniffed at. Creekmouth attracts tenants searching for convenience and value for money, despite not having its own Tube.
- Little Heath, Redbridge-Highest yield 6.6%
This region is not far away from Chadwell Heath and is attractive to renters looking for great schools, greenery and period housing. In addition, the Crossrail will also increase Little Heath’s desirability.
Where in London can you achieve the best yields?
- Yarnton Way, Abbey Wood-Highest yield 6.6%
The Crossrail scheme has led to regeneration work in Abbey Wood, which is scheduled for arrival in 2018. Savvy investors are already purchasing in the area.
- Barking-Highest Yield 6.5%
Barking has been in the public eye since the 2012 London Olympics, where it was host borough. A number of projects have served to renovate the area since then, including building shops, homes and leisure facilities.
- Cranbrook, Ilford-Highest Yield 6.1%
Ilford is set to become another region to highly benefit from the Crossrail scheme, when it appears on the Tube map next year. Homebuyers and investors will be attracted to a quick commute into the city, alongside cheaper prices.
- East Ham-Highest Yield 6.1%
East Ham has benefitted hugely from the investment in the Olympics. It is a very popular location for first-time buyers with a strict budget. Now, it is attracting a number of tenants, due to its good transport links and bustling high street.
- Romford-Highest Yield 5.9%
Property values in Romford have risen sharply in recent years, but the region remains affordable compared to the rest of London. As such, it is still a popular location for investors and tenants.
Chigwell now benefits from the Night Tube, attracting a number of young professionals to the area. Landlords and investors can expect yields to remain strong and even grow in the long-term.