eMoov’s Property Hotspots

The London Underground is the main mode of transport for many Londoners, therefore it’s not surprising to see that property prices and the easy access to a tube station are connected. Online estate agent eMoov has collected data which highlights the demand and prices of properties in different tube zones, making it easier to find London’s property hotspots. We’ve taken a closer look at the buy-to-let profit landlords can make when investing in a one bedroom apartment in the three hot spot locations: Ruislip, Chorleywood or Bethnal Green.

Ruislip

The average one bedroom flat in Ruislip costs £250,000 and the average rent paid for such a property is £1,200 when going by data provided by Rightmove. If you’re taking out a 30 year interest-only mortgage, as many investors do, at a 70% loan-to-value ratio (the minimum deposit for buy-to-let is 30%), you’ll have to pay £583/month for your mortgage. Your annual mortgage payment would thus be £6,996 while your annual rental income would add up to £14,400. This would mean a profit of £7,404 a year and an annual return on investment of 9.25%. You can use a buy-to-yield calculator to work this out for any other property. Ruislip is a great investment hotspot as the Piccadilly, Metropolitan and Central lines are all easily accessible. Ruislip lies in tube zone 6, which according to eMoov, is in very high demand. 

Chorleywood

With 82%, Chorleywood is the tube location with the highest demand. The average one bedroom flat here costs £225,000 while the average rent per month is £1,000. When using the same interest-only mortgage as above, investors will pay £531/month on their mortgage. The annual rental income would be £12,000 and annual mortgage payments would add up to £6,372. This would result in a yearly profit of £5,628 which would mean an annual return on investment of almost 8%. This is a very high yield and investors should consider looking at properties in Chorleywood in more detail.

Bethnal Green

In Bethnal Green, you’ll pay about £350,000 to own a one bedroom apartment, while the monthly rent for such a property is £1,647 according to Rightmove. This means landlords will have an annual rental income of £19,764. Investors with the same interest-only mortgage as described earlier, will pay £817/month, which adds up to an annual mortgage payment of £9,804. Overall this results in an annual profit of £9,960 and an annual return on investment of over 9% making Bethnal Green a great property hotspot for investors.

When searching for a flat or house on Zoopla, one will quickly notice the property price difference when comparing several locations in London. Landlords looking to buy a property in the city to rent it out should make sure their investment will provide them with a good buy-to-let yield. Properties in districts such as Ruislip, Chorleywood and Bethnal Green have the potential of being great investments.