The Best Buy-to-Let Areas in London

When it comes to investing in property in the UK, London is the go-to location that first comes to mind for a lot of investors. As the biggest city in the UK that boasts decades worth of regeneration and investment, a thriving cultural scene, and plenty to see and do, the London population continues to grow year on year – soon to hit 9 million.

As a result, investors looking for high demand don’t go short of this in London. One of the most desirable tenant groups for buy-to-let investors, young professionals, are a big demographic due to the capital’s reputation as a hotspot for business. London is the epicenter of everything from finance to fashion, and as a result, sees high numbers of young people moving to the city to kickstart their careers or to study in one of the city’s many prestigious universities.

With the average property prices in London well exceeding those in other parts of the UK, buying property just isn’t an option for many of the city’s residents, which has led to a high demand for quality rental properties in prime locations. Investors can also expect capital growth returns with the right London investment, with Savills predicting average property price growth of 17.1% by 2029.

One investment strategy that has stood the test of time in the UK is buy-to-let. With multiple income streams and the added benefit of investing in a physical asset, you can understand why investors are still putting their money into buy-to-let properties across the UK.

As a long-term strategy, London property investment can provide a steady income stream and potential capital appreciation over time.

Anybody considering investing in London properties needs to consider the specific parts of the city that are most likely to generate the highest return on investment.

E15 – Newham, Waltham Forest, Hackney, Tower Hamlets

• Average House Price – £466,379
• Average Monthly Rent – £1,968
• Gross Average Rental Yield – 5.06%

E15’s local authority areas are Newham, Waltham Forest, Hackney, and Tower Hamlets. In particular, Newham is known as a buy-to-let hotspot with comparatively affordable property.

It has one of the highest populations of any London borough and boasts a busy commercial area with many businesses.

Major regeneration is underway in the former Royal Docks area south of Newham borough. Billions of pounds are being invested to create a whole new city district. Up to 30,000 new homes, business spaces, amenities, and public transport links will be built. The area is also an Enterprise Zone.

SE8 – Lewisham, Greenwich, Southwark

• Average House Price – £446,303
• Average Monthly Rent – £2,073
• Gross Average Rental Yield – 5.57%

This area covers the Deptford district of London, which is on the south bank of the River Thames and is considered a fast-developing area. The Lewisham local council have been putting efforts into regenerating Deptford, which is good news for property investors who can benefit from increasing capital value and higher rents as the area becomes more popular.

Lewisham itself has benefited from extensive regeneration over the past years, with new plans to extend the Bakerloo Line to Lewisham and Hayes potentially making the area more attractive to those working in Central London.

E16 – Newham

• Average House Price – £451,547
• Average Monthly Rent – £2,224
• Gross Average Rental Yield – 5.91%

As mentioned, Newham is considered one of the best real estate investments in London. According to the BBC, Newham had the country’s most extensive annual rent increase this year, showing substantial rental demand for this district.

SE28 – Greenwich, Bexley

• Average House Price – £324,402
• Average Monthly Rent – £1,729
• Gross Average Rental Yield – 6.40%

Bexley is known as a cheaper area of London, but the value of property has rapidly increased as high-earners are priced out of the central London zones and pushed into the outer areas. But at this point, the average property price is still much lower than the London average.