Calling all London landlords – Look to Croydon for some of the strongest rental yields in the capital, according to new figures.
Croydon has been ranked in the top ten best places for buy-to-let investment in London, as landlords can achieve average yields of 5% per year.
London estate agent Portico has compiled a list of the areas it believes are emerging buy-to-let hotspots in the capital. Unsurprisingly, many of the areas identified are located in outer London boroughs, where house prices are typically lower, meaning that rental returns are stronger for landlords.
The top ten places for buy-to-let in London and their potential yield
Ilford – 5.5%
- Hounslow – 5.3%
- Greenford – 5.3%
- Croydon – 5%
- Wood Green – 5%
- Whitechapel – 4.8%
- Forest Gate – 4.8%
- West Drayton – 4.8%
- King’s Cross – 4.4%
- Acton – 4.1%
So why is Croydon such a good location for London landlords?
The Head of Multi-Let London, Fredrik Sandvall, explains: “Croydon is a buy-to-let hotspot because of its affordable property prices, compared with many other parts of London, and its excellent transport links into the City. Croydon is undergoing a massive £5.25 billion regeneration programme across East Croydon, West Croydon, Mid Croydon, Fairfield and Old Town.
“At the heart of these transformative plans will be a £1.5 billion retail and leisure complex by Westfield/Hammerson, eight new hotels, more than two million square foot of office space and 8,000 new homes. The first Boxpark outside Shoreditch, Boxpark Croydon, is due to open in October, outside East Croydon station, and will offer more than 40 food and drink outlets, alongside shared open spaces and regular events. With blue-chip employers, a thriving town centre and growing demand for rental accommodation, Croydon is already a great place to invest.”
He continues: “Croydon offers investors some of the best yields in London. A few specific Croydon areas even beat the number one on Portico’s London top yield list, with average yields in Purley of 5.6%, Coulsdon of 5.5% and West Wickham of 5.4%. However, if landlords want to boost their yields, they don’t need to look outside Croydon.
“A high quality HMO [House in Multiple Occupation] in the town will give an annual yield of between 8%-15%. A three-bedroomed, single let property in Croydon may typically achieve a gross rent of £1,500 per calendar month for a family. If it is converted into an HMO, the gross rent on the same property could exceed £4,000 per calendar month. 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.”
Sandvall adds: “Many standard properties can be successfully converted to HMOs with the introduction of C4 building regulations. If a high quality refurbishment is undertaken, the property can attract working professionals in the right location, who are prepared to pay more for a shared property with a superior finish. Luxury ensuites, large TVS, premium kitchen appliances and furnishings are the type of features that help to generate a high yielding HMO, where the market conditions accommodate.”
If you decide to invest in Croydon, or are a London landlord already, remember to protect your investment in the capital with the widest Landlord Insurance available on the market.
Just Landlords can protect your property with our 33 essential covers, which are included as standard – no wonder we have been rated 5-star by Defaqto!