Discover London’s highest-yielding rental areas in 2024, with a detailed analysis of rental returns across prime locations like Tottenham (6.0%) and Bow (5.9%).
This comprehensive guide is perfect for property investors, buy-to-let landlords, and real estate professionals looking to maximize their rental income in London’s property market.
Learn how to calculate yields, identify promising areas, and make informed investment decisions in one of the world’s most dynamic real estate markets.
What is rental yield?
Rental yield is the annual rent you earn from a real estate investment as a percentage of the property purchase value or market price.
You can calculate the gross rental yield of a property or its net rental yield.
- Gross rental yield
Gross rental yield = (Annual rental income / Property value) × 100
Gross rental yield is the total rental value earned annually from the property. It doesn’t consider your expenses towards maintenance and upkeep of the property.
For example, the monthly rent for a house is £2000, and the purchase price of the house is £500000.
So your annual rental income is £2000 × 12 = £24,000
And, the Gross rental yield= (24,000/500,000) × 100 = 4.8%
A higher gross rental yield doesn’t determine better rental value, as the maintenance cost or tax payments affect the overall rent earned.
- Net rental yield
Net rental yield = [(Annual rental income – Annual expenses)/ Property value] × 100
The net rental yield of your property is the amount earned from rental income, where you also consider the expenses made towards maintaining the property.
For example, the monthly rent of a property is £2000, which makes your annual rental income £24,000
Your annual expense towards the property is £5000, and the property value is £500000
So the Net rental yield= [(24,000-5000)/500000] × 100 = 3.8%
The net rental yield is the exact amount you earn from your property.
What is a good rental yield in London?
A good rental yield in London is generally over 5%. Barking, Dagenham, and Greenwich have an average rental yield of 6.20%, which is considered good. On the other hand, Westminster has an average rental yield of 2.30%, and Covent Garden and Barnet have a 2.70% rental yield, considered the worst in London.
Why Invest in London Buy-to-Let Property?
The average monthly rental in London as of February 2024 is £2,121, with a +4.2% change in the last 12 months. The average rent in London is double the rent of new lets in the UK, making it a great place to invest in London buy-to-let property.
London’s highest buy-to-let rental yields for 2024
Below are the buy-to-let rental yields for 2024 in different parts of London.
Central London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| EC1 | Barbican, Clerkenwell, Finsbury | £777,122 | 4.7% |
| EC2 | Moorgate, Liverpool Street | £1,284,543 | 3.1% |
| EC4 | Fleet Street, St Paul’s | £752,498 | 4.1% |
| WC1 | Bloomsbury, Gray’s Inn | £810,205 | 4.3% |
| WC2 | Covent Garden, Holborn, Strand | £1,553,845 | 3.1% |
East London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| E1 | Mile End, Stepney, Whitechapel | £604,160 | 5.0% |
| E2 | Bethnal Green, Shoreditch | £577,365 | 4.8% |
| E3 | Bow, Bromley-by-Bow | £429,969 | 5.9% |
| E4 | Chingford, Highams Park | £533,620 | 4.4% |
| E5 | Clapton | £562,258 | 4.6% |
| E6 | East Ham, Beckton | £411,214 | 5.8% |
| E7 | Forest Gate, Upton Park | £456,176 | 4.8% |
| E8 | Hackney, Dalston | £613,455 | 4.4% |
North London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| N1 | Barnsbury, Canonbury, Islington | £732,451 | 4.5% |
| N2 | East Finchley | £1,133,575 | 3.2% |
| N3 | Finchley Central | £656,464 | 3.8% |
| N4 | Finsbury Park, Manor House | £596,907 | 4.5% |
| N5 | Highbury | £668,383 | 4.3% |
| N7 | Holloway | £564,784 | 5.2% |
| N9 | Lower Edmonton | £367,533 | 5.4% |
| N17 | Tottenham | £423,967 | 6.0% |
| N18 | Upper Edmonton | £385,644 | 5.6% |
North West London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| NW1 | Camden Town, Regent’s Park | £835,110 | 4.4% |
| NW2 | Cricklewood, Neasden | £590,039 | 3.9% |
| NW3 | Hampstead, Swiss Cottage | £1,219,697 | 4.2% |
| NW4 | Brent Cross, Hendon | £600,196 | 3.7% |
| NW5 | Kentish Town | £672,252 | 4.2% |
| NW8 | St John’s Wood | £1,327,807 | 4.8% |
| NW9 | Colindale, Kingsbury | £458,503 | 5.3% |
| NW10 | Harlesden, Kensal Green, Willesden | £531,985 | 5.1% |
South East London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| SE1 | Bermondsey, Borough, Southwark, Waterloo | £770,038 | 4.4% |
| SE2 | Abbey Wood | £434,717 | 5.3% |
| SE5 | Camberwell | £480,998 | 5.0% |
| SE8 | Deptford | £445,034 | 5.2% |
| SE13 | Hither Green, Lewisham | £403,546 | 5.3% |
| SE25 | South Norwood | £373,615 | 5.1% |
| SE28 | Thamesmead | £356,438 | 6.0% |
South West London rental yields
| Postcode district | Areas covered | Average asking price | Avg rental yield |
| SW1 | Belgravia, Pimlico, Westminster | £1,720,948 | 3.2% |
| SW2 | Brixton, Streatham Hill | £548,275 | 4.7% |
| SW3 | Brompton, Chelsea | £1,922,622 | 2.7% |
| SW4 | Clapham | £622,603 | 4.8% |
| SW6 | Fulham, Parson’s Green | £867,986 | 4.3% |
| SW11 | West Brompton | £878,082 | 4.8% |
| SW15 | East Sheen, Mortlake | £612,860 | 4.9% |
| SW18 | Earlsfield, Wandsworth | £625,507 | 5.0% |
West London rental yields
| Postcode district | Areas covered | Average property price | Avg yield |
| W2 | Bayswater, Paddington | £1,093,597 | 5.1% |
| W3 | Acton | £564,337 | 4.7% |
| W4 | Chiswick | £724,691 | 4.3% |
| W5 | Ealing | £639,968 | 4.2% |
| W6 | Hammersmith | £815,895 | 4.6% |
| W10 | Ladbroke Grove, North Kensington | £767,752 | 4.4% |
| W12 | Shepherd’s Bush | £697,247 | 4.8% |
| W13 | West Ealing | £583,691 | 4.4% |
Some of the highest buy-to-let rentals area in London in 2024:
- E3 – Bow, Bromley by Bow
Average asking price: £429,969
Average rental yields: 5.9%
Average rental value: £2,099 per month (in Tower Hamlets borough)
The demand for rentals in these areas is higher for young professionals looking for a convenient location with easy access to the heart of the City and Canary Wharf. Bow has an excellent transport network, including the Bow Road and Bromley-by-Bow tube stations and the availability of local amenities. Plus, the regeneration projects like the Bow Riverside development, Bow Bells Court, St. Clement’s Hospital Redevelopment, regeneration of Fish Island and Hackney Wick, etc., are attracting more people to Bow.
- N17 – Tottenham
Average asking price: £423,967
Average rental yield: 6.0%
Average rental value: £464 per week
Tottenham offers a good rental yield to investors, mainly because of its extensive regeneration projects like Tottenham Hale and improved transport links like the Seven Sisters station. This place is popular among young professionals and families looking for affordable rental housing with good connectivity to Central London.
- NW9 – Colindale, Kingsbury
Average asking price: £458,503
Average rental yield: 5.3%
Average rental value: £2,143 per month (in Brent Borough)
This place offers affordable housing options, good transport links, and proximity to green spaces such as Fryent Country Park, attracting young professionals, students, and families for rentals. Colindale and Kingsbury offer new developments and established residential areas, availability of good schools, healthcare services, and access to local amenities attracts diverse tenants. Additionally, these areas have the lowest crime rates than other localities in London.
- SE28 – Thamesmead
Average asking price: £356,438
Average rental yield: 6.0%
Average rental value: £867 per month
The opening of Abbey Wood Elizabeth Line station significantly impacted rental property demands in Thamesmead. This area has higher rental demands from people looking for affordable housing and a quick link into Central London. The area comprises multiple new housings, improved infrastructure, and better community facilities that attract families for better living.
- N18 – Upper Edmonton
Average asking price: £385,644
Average rental yield: 5.6%
Average rental value: £588 per week
Upper Edmonton is a great place to live for its green spaces, availability of top state schools, proximity to Major motorways A10 and A406, and London Overground Network, and a mix of historical and cultural influences. Families and young professionals are increasingly crowding in Upper Edmonton, increasing the area’s rental demands.
Is Buy to let Property in London a Good Investment?
Yes, Buy to let property in London is a good investment as the demand for rentals in its prime locations is increasing with the rise in land and housing prices. In the next 5 years, mainstream property prices are forecasted to rise by nearly 14%, making it difficult for most people to afford a property, and they will start looking for rentals. The strong economy of London and its potential for capital appreciation, diverse population, and global appeal make it an attractive property investment option.
However specific challenges come with investment in London property. This includes the high initial investment required for rising property prices, and dealing with ongoing costs like maintenance fees, property taxes, and potential void periods.
How to pick the right rental yield areas in London?
To pick the right rental yield areas in London, here are a few things you can do
- Conduct thorough market research: Look for accurate Property Data from government websites, statistics, and market reports to identify areas with high rental yields.
- Focus on areas undergoing regeneration development: These properties attract young professionals and families searching for better job opportunities. Plus, such areas have strong transportation links and access to better amenities.
- Consider tenant demographics: Identify the availability of your target tenants in different areas and their demand for rentals.
With over 5 years in the industry, Pluxa Property has the experience and expertise to find the best property in London for your buy-to-let Investments. You can go through our profile, check out all the currently available properties, and see how detailed we are in finding the best ones.
How Pluxa Property can help you in London property investment
- Invest in prime location properties
Pluxa Property has the knowledge and experience of working in London for 5+ years, allowing us to find suitable properties to invest in at prime locations. We consider different criteria of our clients, like the budget, location, and target tenants, while fetching properties.
- Negotiate for good deals.
We ensure you don’t settle for less. It means Pluxa Property assists you in negotiating good deals with property owners and helps you buy them at comparatively lower market prices. With prime locations, we also ensure higher rental demands, which means you invest less and earn more.
- Stress-free investment process
Property investments are a headache, but with us, everything goes smoothly. We do everything from sourcing properties to finding and maintaining tenants. Our target is to reduce void periods so that you don’t face losses from the investment or suffer from legal proceedings. Pluxa Property provides comprehensive services to maximize your investment returns and reduce stress.
- Assistance with property refurbishment
All properties might not be suitable for rentals as per your criteria. We refurbish the properties according to need and make them presentable to your target tenants so that you can increase your rent. We simplify managing conversions of large houses into service accommodations and transform smaller homes into luxury apartments.
- Finding the best investment plan
Not all investment plans are made for you! We at Pluxa Property understand your needs and your other constraints. Our experts evaluate your goals and finances and help you find the best investment plan that simplifies property buying. This service is free, but you may need to pay a 5% deposit for off-plan or completed properties.
Peter Juhasz is the founder of Pluxa Property, the biggest property investment company in UK and Group CEO of AIP Capital Group and a property investment expert with over a decade of experience in the UK market.
He built a successful property company using innovative cashflow strategies like Serviced Accommodation and HMOs, scaling to 200 units in four years.
Peter leads a team specializing in property and business acquisitions across various sectors. A former co-host of “Cashflow With Property,” he shares his expertise in real estate investing and business scaling.
He is committed to continuous learning and helping SME owners and investors maximize their returns, driven by his passion for empowering others to achieve their financial goals.
To learn how Pluxa Property can help you in UK property investment, contact our experts.
