With the opening of the Elizabeth line last week, it’s no surprise that properties within a short distance of Crossrail stations are witnessing a price boost.
New data by Revolution Brokers has revealed which Crossrail stations currently make the best investment for buy-to-let landlords based on the average available rent yield.
The mortgage broker analysed current rental and housing market data to find the average rental yield in each Crossrail station postcode, then compared it to the previous year.
It found that, on average, a buy-to-let investment within a Crossrail postcode will return a yield of 3.7% – a marginal increase from 3.4% a year ago.
Top Crossrail rental yields
Reading’s RG1 postcode currently ranks as the strongest area for a Crossrail buy-to-let investment with a 5.1% yield.
However, East London also boasts some of the strongest yields available along the Elizabeth line. The E16 postcode, home to Custom House Crossrail station, currently holds a yield of 4.9%. A little further down the line, the E15 postcode features the Maryland and Stratford stations – both holding a respectable yield of 4.8%.
Southall enjoys a current average rental yield of 4.8%, while Forest Gate and Canary Wharf rank high at 4.5%.
Other stations to make the top 10 best buy-to-let investments along the Elizabeth line at present include Whitechapel (4.4%), Woolwich (4.3%), Abbey Wood (4.3%), West Drayton (4.3%) and Manor Park (4.3%).
In contrast, the average yield is currently just 1.9% in the W1 postcode, home to the Tottenham Court Road and Bond Street Crossrail stations.
Rental yield growth
Custom House and Forest Gate not only possess some of the highest average rental yields, but at 0.8%, they’ve seen the largest annual increases across the entire network.
Reading, Southall, Canary Wharf and Whitechapel have also seen some of the strongest growth, up 0.7% in the last year.
Twyford has seen the largest annual decline in the average rental yield at -0.6%, while Chadwell Heath, Romford, Harold Wood, Langley, Goodmayes and Seven Kings have seen a decline, albeit to a more marginal extent.
A wealth of postcodes to invest in
Almas Uddin, founding director of Revolution Brokers, comments: “Crossrail is one of the most significant developments to travel infrastructure within London and the South East in many years, so it’s hardly surprising that homebuyers and tenants alike are flocking to areas with direct access to the Elizabeth line.”
Uddin says this heightened demand for rental properties, in particular, presents a great opportunity for buy-to-let investors, as demand for Crossrail rental homes is only going to grow now that the service is finally running.
“Of course, property values along the route have already climbed significantly and so it’s important to find the right balance between this initial cost and the rental income available to ensure a good return on your investment,” he adds.
“The good news is that despite this strong market growth, there remains a wealth of stations offering a very respectable rental yield and so now is as good a time as any to invest.”
CrossRail Station | Current Average House Price | Current Average Rent (per month) | Current Average Rental Yield | Rental Yield Annual Change |
Farringdon | £826,947 | £2,624 | 3.8% | 0.9% |
Custom House | £451,439 | £1,848 | 4.9% | 0.8% |
Forest Gate | £474,217 | £1,795 | 4.5% | 0.8% |
Reading | £282,915 | £1,196 | 5.1% | 0.7% |
Canary Wharf | £550,333 | £2,062 | 4.5% | 0.7% |
Whitechapel | £601,966 | £2,202 | 4.4% | 0.7% |
Paddington | £1,073,971 | £3,493 | 3.9% | 0.7% |
Southall | £389,013 | £1,557 | 4.8% | 0.7% |
Maryland / Stratford | £441,602 | £1,772 | 4.8% | 0.6% |
West Ealing | £639,641 | £1,690 | 3.2% | 0.6% |
Shenfield | £575,491 | £1,560 | 3.3% | 0.5% |
Heathrow T2,3,4 & 5 | £397,443 | £1,397 | 4.2% | 0.4% |
Liverpool Street | £1,178,447 | £2,988 | 3.0% | 0.4% |
Acton Main Line | £555,008 | £1,629 | 3.5% | 0.3% |
Taplow / Maidenhead | £508,877 | £1,332 | 3.1% | 0.3% |
Woolwich | £413,360 | £1,510 | 4.4% | 0.3% |
Abbey Wood | £380,233 | £1,373 | 4.3% | 0.3% |
Tottenham Court Road / Bond Street | £2,285,739 | £3,653 | 1.9% | 0.3% |
West Drayton | £375,434 | £1,354 | 4.3% | 0.2% |
Hayes and Harlington | £384,550 | £1,351 | 4.2% | 0.2% |
Hanwell | £542,013 | £1,525 | 3.4% | 0.1% |
Ealing Broadway | £642,021 | £1,738 | 3.2% | 0.1% |
Ilford | £416,277 | £1,346 | 3.9% | 0.1% |
Manor Park | £452,153 | £1,608 | 4.3% | 0.1% |
Gidea Park | £517,473 | £1,317 | 3.1% | 0.1% |
Slough / Burnham | £336,562 | £1,080 | 3.9% | 0.1% |
Brentwood | £403,988 | £1,254 | 3.7% | 0.1% |
Iver | £588,567 | £1,248 | 2.5% | 0.1% |
Goodmayes / Seven Kings | £548,526 | £1,425 | 3.1% | -0.1% |
Langley | £448,586 | £1,230 | 3.3% | -0.3% |
Harold Wood | £397,406 | £1,397 | 4.2% | -0.3% |
Romford | £423,740 | £1,282 | 3.6% | -0.3% |
Chadwell Heath | £418,138 | £1,442 | 4.1% | -0.4% |
Twyford | £636,652 | £1,107 | 2.1% | -0.6% |
Average overall | £520,708 | £1,605 | 3.7% | 0.3% |
Bigger homes in demand and driving capital appreciation