What are the best Buy To Let Areas in London? Well watch this video to find out 5 of the top places where the smart investors are taking advantage.
Hi I’m Ugo Arinzeh with Onyx Property Consultants and Keller Williams.
If you’re new to my channel please make sure to subscribe as I put out weekly videos and share top tips for those moving to London or investing in the London property market.
As a property agent, I worked with countless buyers and investors buying property in this incredible city.
Having moved over from America, I specialise in working with international buyers and landlords to help them find the perfect property and look after it.
In today’s video I’ll share the important things to consider if you’re looking to invest in a rental property here in London. It’s part of my Investing in London series for Landlords and Investors.
Make sure you stay till the end as I’ll not only give you the top areas, but also give you tips on what you should consider when choosing a BTL investment.
Before we jump in, I just wanted to review for everyone, what exactly is rental yield. In essence it is the return a property investor is able to earn based on rent. It’s referred to as a percentage and it’s calculated by taking the total annual rent on a property divided by the total amount invested in a property. So if you bought a property for £850,000 and you are able charge a rent of £3,000 per month or £36,000 per annum, that would earn you a gross yield of 4.23%.
Getting a strong yield in London can challenging as property prices have outstripped rental rates. Average BTL yields have been around 4% or less and that is really weak when compared to areas like Liverpool where the yields are close to 12%. In the past investors have sacrificed low yield in return for solid price appreciation enjoyed here in London.
So first up and leading the pack is East Ham in east London where you can earn yields close to 5% and that is followed Stratford where you can earn an average yield around 4.5%. East Ham is being improved with millions being poured in over the next 5 years. It’s underground station is in zone 3 and runs the District & Hammersmith & City lines. Average property prices are around £350K with monthly rents around £1400.
Stratford continues to develop extensively having been kickstarted by the billions poured in for the 2012 Olympics. Thousands of new units are being developed around Queen Elizabeth Park It has the Jubilee as well as Central line, an overground station, Docklands Light Rail and is also a national rail station with trains to Liverpool Street. Located in zone 2/3 , it is the busiest station in the tube network that is not in zone Whenever Crossrail arrives in the future, it will extend the rail network beyond Liverpool Street to Reading and Heathrow airport.
Both East Ham and Stratford are located in the borough of Newham.
So what are your thoughts about East Ham and Stratford? Drop me a comment below about what areas you are considering.
Next up to be considered is Ealing Broadway in west London. While rental yields are only around 3%, it is a highly popular area for renters. It is also slated to get Crossrail which will slash the Central Line commute to Bond from 25 minutes to 10 minutes. Nearby there are multiple other stations providing extensive transport options. Ealing is a leafy area in zone 3 and it’s highly popular with families, having some of London’s highest percentage of children.
Heading northwest, I’d like to highlight the area of Wembley where you can enjoy yields around 4%. It is in the midst of a £3 billion redevelopment plan, one of the UK’s largest. It is centred around Three Lions Football Stadium complete with park and swimming lake, thousands of new homes, offices and maybe a new music venue. Wembley is located in the borough of Brent and its many transport options include Wembley Stadium, Wembley Central and North Wembley, all in zone 3.
Finally, I’m going to mention White City with the Westfield shopping centre launched in 2008 and nearby Shepherds Bush. It is enjoying a massive redevelopment of the former BBC headquarters being transformed into residential, cultural and entertainment facilities. Though yields are around 3%, this area will benefit from long term appreciation.
In summary today we highlighted 5 areas of London to consider for BTL yields. We talked about East Ham and Stratford in east, Ealing Broadway west, Wembley in northwest and White City
So if you’re thinking about investing in a BTL property, my top tips to consider include:
- Transport links
- Schools in the area
- Regeneration projects and plans
- Local amenities – shops, bars, restaurants etc.
- Distance to universities and/or work hubs