Investing in buy-to-let properties in London can be a lucrative venture, especially when you target areas with high rental demand, driven by universities, hospitals, and other employment hubs. This is Fox Davidson’s 2025 look into the top 10 places in London where rental yields are promising, property prices are balanced for investment, and the local demand supports high occupancy.
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Greenwich (SE28)
Rental Yield: Approximately 6.1% Average Property Price: £450,000
Why Invest?
- Universities: Proximity to the University of Greenwich drives student demand.
- Hospitals: The Queen Elizabeth Hospital nearby ensures a steady need for housing.
- Unique Feature: The area benefits from ongoing regeneration projects, enhancing its appeal.
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Hackney (E9)
Rental Yield: Around 5.4% Average Property Price: £580,000
Why Invest?
- Cultural Hub: Known for its vibrant arts scene, attracting young professionals and creatives.
- Universities: Close to Queen Mary University, adding to student rental demand.
- Unique Feature: The area has seen significant gentrification, boosting property values.
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Crouch End (N8)
Rental Yield: About 4.9% Average Property Price: £750,000
Why Invest?
- Community Vibe: Offers a village-like atmosphere within the city, appealing to families and professionals.
- Hospitals: Near Whittington Hospital, increasing demand for medical staff housing.
- Unique Feature: Known for its independent shops and cafes, fostering a strong community feel.
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East Ham (E6)
Rental Yield: Up to 6% Average Property Price: £415,000
Why Invest?
- Transport Links: Enhanced by the Elizabeth Line, making it more accessible.
- Hospitals: Close to Newham University Hospital.
- Unique Feature: Ongoing regeneration projects like the Meridian Water development.
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Wembley (HA9)
Rental Yield: Around 5.2% Average Property Price: £500,000
Why Invest?
- Event-driven Demand: Wembley Stadium draws short-term and long-term renters.
- Universities: Proximity to the University of Westminster.
- Unique Feature: Significant regeneration, including new housing and commercial spaces.
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Clapham (SW4)
Rental Yield: Approximately 4.8% Average Property Price: £850,000
Why Invest?
- Lifestyle: Popular with young professionals due to its vibrant social scene.
- Hospitals: Near St George’s Hospital.
- Unique Feature: Clapham Common provides ample green space, boosting local desirability.
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Bermondsey (SE16)
Rental Yield: Up to 5.6% Average Property Price: £550,000
Why Invest?
- Regeneration: Developments like Bermondsey Spa Gardens enhance the area.
- Universities: Close to London South Bank University.
- Unique Feature: An emerging art and food scene, attracting a diverse tenant base.
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Shepherd’s Bush (W12)
Rental Yield: Around 5.1% Average Property Price: £700,000
Why Invest?
- Transport Hub: Served by the Central line and Overground.
- Universities: Near Imperial College London.
- Unique Feature: Westfield London shopping centre as a major draw.
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Dulwich (SE21)
Rental Yield: Approximately 5.2% Average Property Price: £950,000
Why Invest?
- Affluent Area: Offers a quieter, family-friendly environment.
- Hospitals: King’s College Hospital nearby increases rental demand.
- Unique Feature: Known for its prestigious schools, making it attractive for academic families.
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Canary Wharf (E14)
Rental Yield: About 5.1% Average Property Price: £600,000
Why Invest?
- Business District: High demand from finance professionals.
- Transport: Excellent connectivity with the Jubilee line, DLR, and Crossrail.
- Unique Feature: Rapid transformation into a 24/7 community with residential developments.
Considerations for Investment:
- HMO Potential: Areas near universities and hospitals are ideal for Houses in Multiple Occupation (HMOs) due to high demand from students and medical staff. However, investors should be aware of local licensing requirements for HMOs.
- Rental Yields vs. Capital Growth: While these areas offer good rental yields, consider the balance between immediate rental income and long-term property value appreciation.
- Regulatory Environment: London has stringent landlord regulations, including licensing for certain types of properties. Staying informed about these changes is crucial.
- Market Trends: London’s property market has been volatile; investor sentiment often reacts to economic forecasts, interest rates, and policy changes.
Final thoughts.
Investing in buy-to-let in London involves navigating a complex but potentially rewarding market. The areas listed above offer a blend of high rental yields, growth potential, and strong tenant demand due to educational and healthcare institutions. As with any investment, due diligence, understanding local dynamics. You should also consult local estate agents and London mortgage brokers such as Fox Davidson. Remember, the landscape for buy-to-let is ever-changing, and you really need to have your finger on the pulse to ensure you are maximising yields for your property.
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