Where should you invest in inner-city London?

London based estate agent Portico has conducted an interesting investigation which reveals the best areas for rental yields in the capital.

According to the research, Greenwich provides the highest yields of any inner-city borough. The region was found to offer buy-to-let landlords the best returns and the most affordable rents.

Capital gains

Investors in Greenwich can expect around a 6% yield. Average monthly rental prices in the region are currently £1,477.

What’s more, room rents in the borough are cheaper than many other regions of the capital. The average monthly rent in the borough of Greenwich between April and June was £805, a rise of 12% year-on-year.

In inner-city London as a whole, room rents in Abbey Wood saw the largest rise of 21%. This can be attributed to the Crossrail service, scheduled to start in 2018. What’s more, the borough is home to some of the cheapest regions to rent in inner-London. These include Charlton, where rents are £554pcm and Plumstead and Woolwich, with rents standing at £557.

Where should you invest for the best yields in inner-city London?

Where should you invest for the best yields in inner-city London?

Excellent returns

Mattias Sandvall, Head of Multi-Let London, feels that more investors could soon be investing in the borough of Greenwich.

Sandvall noted, ‘Greenwich borough gives landlords excellent yields and is a great place to invest. It is very popular amongst families, commuters and young professionals. Many are attracted to the borough’s parks and outdoor attractions, including Greenwich Park, Blackheath Common, the large open paved area where the Cutty Sark is dry-docked by the river, the Observatory and the National Maritime Museum.’[1]

‘It also has a thriving student population with Greenwich University and rooms in Houses of Multiple Occupation (HMOs) are very popular amongst students and professionals. Many tenants choose shared accommodation for both financial and social reasons.  A more demanding, but rewarding way for landlords to achieve higher yields than traditional single let is multi-let the property. In fact, landlords can increase their rental yields by switching from single let accommodation to HMOs. For example, a three-bedroomed, single let property in the Greenwich borough may typically achieve a gross rent of £1,800 pcm for a family,’ Sandvall continued.[1]

Concluding, Sandvall said if a property is made into a HMO, ‘the gross rent on the same property could exceed £4,000 pcm. This represents a significant profit opportunity for buy-to-let investors who have the required expertise to generate sustainable returns in this increasingly competitive market.’[1]

[1] http://www.propertyreporter.co.uk/landlords/where-are-the-best-btl-yields-for-inner-london.html

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