With Christmas and the New Year now over, landlords, investors and property experts are back to questioning what the coming twelve months will bring to the property market, and what the most lucrative moves will be to make.
The pandemic, despite some troublesome variants, is largely taking a back seat as ‘normal life’ slowly returns, and the capital has been bouncing back well. With demand rising and inventory remaining relatively low, the market is set to perform with gusto, despite the recent interest rate hike warnings from the Bank of England.
Interest rates may be about to rise, but the general consensus is that increases will be gradual, incremental changes, and the market conditions are poised to allow for continued growth. While some of the recent house price growth forecasts grabbing the headlines have seemed a little lofty, Portico believes projections for steady, continued growth are sensible.
So, with that in mind, where are the best places for landlords and investors to consider buying property in London?
According to Portico’s recent data analysis, the following London hotspots are primed for excellent investment opportunities due to a combination of affordability, rental yield performance, and regeneration in the area.
- Tottenham - significant room for equity growth when compared to its broader borough market position, with regeneration projects in the works to back that growth
- Seven Sisters - an up-and-coming area offering affordable London living in close proximity to many popular, vibrant areas
- Edmonton - with excellent transport links and huge regeneration benefits, Edmonton is a vibrant multicultural community that offers fantastic rental yields
- Barking - back again from our ‘Where to buy property in 2021’ guide, Barking still represents outstanding affordability and opportunity for growth thanks to its connectivity and regeneration efforts
- Ilford - with the eagerly anticipated impact of the Elizabeth Line completion coming soon, Ilford is certainly one to watch - affordable property prices, steady rental yields and great for commuters
- Chadwell Heath - housing affordability, Elizabeth Line connectivity on its way, proximity to many buzzing retail and leisure hubs, and healthy rental yields - Chadwell Heath is a fantastic option for investors looking for a more suburban neighbourhood.
Across the capital’s six investment hotspots, Chadwell Heath and Edmonton offer a healthy yield of 5.5%, closely followed by Ilford and Barking at 5.3%.
Tottenham and its southern district of Seven Sisters fall somewhat lower at 4.5% and 4.4% respectively. However, the up-and-coming status of these areas in relation to the property growth that surrounds them positions them well for increasingly lucrative investment in the near future.
There are many pockets of London that investors should have a close eye on, and these six hotspots represent some of the prime investment opportunities perfectly. Take Barking, for example; very affordable average house prices by London standards, coupled with excellent rental yields, transport connectivity and regeneration works make this borough a stand-out investment hotspot.
All six areas represent places poised for both capital and rental yield growth, given current property price points, rental yields and regeneration-related projections. Landlords need to invest in areas that are hotting up but still present opportunities for considerable price growth, and these areas do just that.
*Sophie Durkin is Portico’s regional director - landlords can use Portico’s rental yield map.
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