London-focussed lettings agency Portico has drawn up highly localised hotspots within the capital for landlords seeking the best yields.
According to the agency, East London offers the best rental yields in the capital.
Barking has one of the lowest median house prices across Greater London and the largest yield in the capital at 5.9 per cent. The agency says the area has seen significant redevelopment in recent times, reflected in strong demand from tenants.
Upney - part of Barking itself - has a yield of 5.8 per cent while third place in Portico’s league table is Wall End - also on 5.8 per cent.
Other high-yield locations identified by the agency include Hayes and Harlington on 5.1 per cent while in south London, Mitcham offers 4.9 per cent.
Robert Nichols, Portico CEO, says: “Landlords and tenants have both changed their thinking in recent years due to a combination of factors.
“While property prices rose overall during the first half of the last decade and climbed 74 per cent between 2010 and 2020, rents largely followed modest wage rises, and rental yields suffered somewhat as a result – especially in areas around central and West London.
“Heading into the new decade, coupled with Brexit, the global health crisis heaped further uncertainty on an already subdued property market, and that has carried into the current year.
"Despite this, our research shows that there are still healthy rental yields to be found in London - if you know where to look.
“Outer London areas are actually seeing rent increases between one and three per cent as tenants - now spending a lot more time at home - migrate from more central areas to the suburbs looking for more space. East London is still a buy to let hotspot and we expect demand from tenants to increase as lockdown restrictions ease.”
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