A recent poll by Simply Business has revealed that over 70% of buy-to-let investors prioritise rental rents over capital gains when making property purchase decisions – so with that in mind, London based residential agent Portico have used their Interactive Yield Map to find the top 10 areas in London with the highest rental yields:
1. Elm Park, Havering
Current highest yield (found with the Portico Interactive Yield Map): 8.5%
London’s highest yield of 8.5% is found in Elm Park in the east London borough of Havering.
With rents continuing to rise across the capital, an increasing number of people are moving to the outer boroughs in search of more affordable accommodation. Havering is a prime example of this, experiencing double-digit growth over the past 12 months according to Rightmove.
2. Chadwell Heath, Barking & Dagenham
Current highest yield: 8%
Chadwell Heath in east London offers investors a high yield and good prospects for long-term capital growth. Like Havering, Barking & Dagenham is the only other London borough to experience double-digit growth over the last year.
This is a direct result of Crossrail, which will arrive at Chadwell Heath railway station in May 2017. When the route fully opens in December 2017, passengers will be able to travel straight to Canary Wharf in 23 minutes and Bond Street in around half hour.
3. Creekmouth, Barking & Dagenham
Current highest yield: 6.8%
Creekmouth in Barking and Dagenham may be an extremely industrial area, but it produces a strong 6.8% yield.
The industrial area surrounding River Road and Thames Road is actually one of Barking and Dagenham’s largest employment areas, which attracts tenants looking for convenience and value for money. While Creekmouth does not have its own Tube, there is a proposal to extend the Overground to a new station at nearby Barking Riverside.
4. Little Heath, Redbridge
Current highest yield: 6.6%
Little Heath, not far from Chadwell Heath, attracts renters looking for Outstanding schools, green spaces and handsome period housing.
As mentioned earlier, Chadwell Heath will benefit from Crossrail next year, which will increase Little Heath’s desirability too.
5. Yarnton Way, Abbey Wood
Current highest yield: 6.6%
Regeneration has started in Abbey Wood in preparation for Crossrail which will arrive in the area in 2018. Shrewd investors are already purchasing period homes around the station, but the area’s highest yield (6.6%) is located just to the east on Yarnton Way.
6. Barking
Current highest yield: 6.5%
Barking has been in the limelight ever since it was named as the host borough for the London 2012 Olympics. A number of renovation projects have been transforming the borough since then, including the Barking Riverside regeneration project which will bring homes, shops and leisure facilities to Barking. The redeveloped area around Barking railway station offers a high 6.5% yield.
7. Cranbrook, Ilford
Current highest yield: 6.1%
Crossrail will put Ilford on the Tube map when it launches next year, attracting a new wave of renters and homebuyers seeking affordable housing and a quick commute into the City. The area surrounding the soon-to-be Crossrail station produces a healthy 6.1% yield, as does the area of Cranbrook which is slowly being smartened up with new shops, restaurants and cafes.
8. East Ham
Current highest yield: 6.1%
Vibrant East Ham East ham is another area to benefit from the investment in the East village and Olympic Park. It’s one of London’s most popular spots for first-time buyers on a budget, and is also now attracting tenants in bucket loads due to its great transport links and improving high street.
9. Romford
Current highest yield: 5.9%
Property prices in Romford have shot up since Crossrail was announced, but the area (which is still extremely affordable compared to most of London) is still top choice for homebuyers, investors and tenants. A yield of 5.9% can be found on London Road just west of Romford toward Chadwell Heath.
10. Chigwell
Current highest yield: 5.8%
Chigwell, located on the edge of the central line, now benefits from the Night Tube, which will help attract young professionals who work and party in central but can’t afford a Zone 1 or 2 property. Landlords or investors can therefore benefit from a strong 5.8% yield and the potential for capital growth in the long-term.
