Mile End is the capital’s top buy-to-let London hotspot, according to recent research published by London estate agent Portico.com.
It has been revealed that there are eight main London areas which possess buy-to-let yields that are above 4%. Mile End, a district within East London, currently offers the strongest cash returns at 4.6%, with New Cross and Dalston hot on their heels with yields of 4.5% and 4.4% respectively.
Turning your attention south of the river, areas such as Brixton, Tooting Bec and New Cross all have buy-to-let yields above 4%, offering the most robust returns.
On the other end of the scale, Belgravia, a district in west London, has the lowest buy-to-let yields across the capital at just 2.7%, alongside Chelsea with 2.8%. These areas in particular suffer from low yields due to the dominance of overseas and cash investors, who rely on capital growth instead of rental income.
“Many London landlords still rely on buy-to-let mortgages and a very small difference in yield can affect whether they make a profit or a loss. Location is everything when it comes to rentals and with rental yields at more modest levels than a few years ago, minimising void periods to maximise occupancy is more important than ever,” commented Robert Nichols, Managing Director, Portico.com.
Location really is detrimental to the rental yield, and if landlords want to chase this yield, it may well mean looking either further out into Zone 3, or exploring areas on the periphery of already popular areas.