Thinking of investing in London rental property? There are plenty of benefits for landlords, including high demand from a wide range of tenant groups and convenient access to quality tradespeople and property services.

Buy-to-let in London can offer great rewards, as long as you’re clever about where you invest. We explore why investing in London property is worth the risks and how to protect your investment for the long term.

 

The Advantages of Being a London Landlord

Thinking of becoming a London landlord? Here are some of the benefits you can expect;

 

Is Property in London a Good Investment?

There has been a lot of debate recently around whether investing in the UK property market is still a safe investment. Despite some instability in the London property market due to Brexit uncertainties and recent changes to stamp duty and tax relief for landlords, there are still many factors that make London a good opportunity for property investment.

 

High Rental Demand

For one, it is unlikely that the demand for rental properties in popular areas of London will decrease significantly in the long term as London remains a hub for many industries.

With a large number of students and young professionals, London offers a wide range of tenant groups to target.

Shorter term, Brexit uncertainties have been putting off first time buyers from taking the plunge- increasing the demand for rental properties further.

 

Opportunity for Capital Gain

While some property prices in central London have experienced dips, central London prices are now on the rise and there are plenty of up and coming areas marked for big property development projects. By investing in areas likely to experience long-term price growth, you are well placed to earn impressive capital growth when you decide to sell.

 

Where is the Cheapest Place to Buy in London?

House prices vary significantly from each London borough. According to Homes&Property, some of the cheapest areas to buy in London in 2019 include;

  • Barking and Dagenham – average house price £300,518
  • Bexley – average house price £341,784
  • Newham – average house price £365,182
  • Croydon – average house price £365,931
  • Havering – average house price £375,014
  • Sutton – average house price £382,607
  • Hounslow – average house price £395,734
  • Enfield – average house price £396,908
  • Hillingdon – average house price £399,639
  • Greenwich – average house price £411,492

However, the purchase price isn’t the only factor to consider when searching for an investment property.

If you’re looking for buy-to-let, the location’s desirability to your target tenant is just as important as getting a good deal. If you can’t find tenants to fill your property, you risk losing money. That’s why it’s equally important to consider factors such as transport links and the proximity of schools and shops to assess the risks and return.

In addition, looking at rental yield data is essential in order to calculate your return on investment.

 

Best Buy to Let Areas in London

When looking for the right location to buy to let, London has a few hotspots that still offer impressive rental yields.

Totally Money’s Buy to Let rental yield map provides valuable data when searching for the most profitable postcodes. Here are some of the top buy to let areas in London according to the map;

  • E12 in East London including Manor Park, Little Ilford, Alderbrook, Newham and Redbridge have a 6.04% average yield.
  • SE17 in South East London including Walworth and Newington has a 5.75% average yield.
  • IG11 in Barking has a 5.59% average yield.
  • Romford is home to several top performing postcodes including RM9, RM8,RM6 and RM10. Find property inventory services in Romford here.
  • SE11 in South East London including Kennington and Vauxhall has a 5.12% average yield.
  • SE28 including Southwark, Lewisham and Greenwich has a 5.00% average yield.
  • N18 in North London including Upper Edmonton, Edmonton and Enfield has a 4.92% average yield.

 

How Do I Buy My First Investment Property?

Once you’ve decided that becoming a London landlord is right for you, there are several steps you need to take;

 

Choose a Location

Decide on the right location, taking into account your budget, target tenant and the rental yields in the area.

 

Find a Buy-to-Let Mortgage

To start the buying process, you will most likely need to apply for a buy-to-let mortgage. Our guide on buy-to-let-mortgages provides helpful information on the different types of mortgage available and how to choose the right one, as well as tips and advice on the process.

 

Protecting Your Investment

Decided to become a London landlord? Our No Letting Go offices throughout London are home to dedicated and experienced inventory clerks ready to help you on your journey.

From inventory reports to check in services, we can provide professional support to help manage your portfolio.

We offer;

To explore our full list of offices, search our branch pages to find property inventory services near you.

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