Following on from the uncertainty caused by the EU referendum and shock Brexit vote, is it still worth investing in buy-to-let?
Property expert Mark Lawrinson, of Portico London estate agent, explains: “In short, yes. If you are lucky enough to have the capital, there are still some great places to buy to let. In east London, areas within Ilford, Barking and Forest
Gate are still achieving extremely healthy >5.5% yields, with some streets and areas even returning a yield of up to 8%.”
Portico’s Interactive Yield Map shows that in Chadwell Heath in Barking and Dagenham, landlords can achieve a potential yield of 8%. As transport links are a top priority for tenants, the area surrounding Barking train station produces a strong 6.5% yield.
Lawrinson continues: “In west London, areas such as West Drayton, Hounslow and Greenford are showing yields of over 5%, and in certain pockets, this rises to over 6%. For example, Southall Green offers a potential 6.1% yield, and the Cranford area and roads such as Mornington Crescent can achieve a potential 6.3% yield.”
Although finding an area that offers high rental yields is important, if you are looking for a lucrative investment property, it is also key to choose an area that achieves strong capital growth.
Following infrastructure improvement is therefore vital, such as looking at the new Night Tube route, as infrastructure brings regeneration, which brings house price growth.
The good news for landlords is that both east and west London areas are achieving strong capital growth as well as high yields, thanks to the forthcoming arrival of Crossrail.
Lawrinson comments: “West Drayton, as an example, is undergoing a huge facelift as a result of Crossrail, and its proximity to west and central London, as well as Heathrow Airport, makes it a great base for young professionals and those searching for a pied-à-terre. Slightly to the east, though the capital gains aren’t as strong as they were two years ago, Acton is still a hotspot for investors, with plans for a Waitrose to open in the area. And then in east London, Forest Gate and Ilford are becoming the next Bow and Bethnal Green.
“Most key investment areas are now in Zones 3 outwards, but if you are keen to buy centrally, then Whitechapel and Farringdon are safe bets, again thanks to key infrastructure changes such as Crossrail, the Rail Link and the fact that the silicone roundabout is becoming a great area in which to live, work and play.
“For those planning further ahead, look at the Crossrail 2 map and focus on areas such as Croydon or Wood Green and the Haringey Ladder, which is primed for regeneration and gentrification.”
With many areas still offering strong yields to landlords, it seems it is still worth investing in buy-to-let following the Brexit!