The rental prices in London are continuing to rise at a considerable rate but for investors, understanding the best area to invest is crucial. There are many areas that offer excellent capital gains and returns that they have to be investigated.
London stands head and shoulders above the rest of the country when it comes to investing. Property prices are on the up and capital growth is higher than average and for landlords who are still interested in London property investments, rental yields offer excellent levels of return. In the main, east and south London offer the best yields with the West of the city seeing the best capital gains.
East London buy-to-let hot spots
Yields in East London are over 7% and it has some of the best buy-to-let postcodes in London.
Newham performs extremely well but the area does not have the best reputation although it is a good area to invest. Stratford has undergone regeneration and rental yields here are around 4.5%. East Ham is a promising option as the area offers a 29.1% return on investment. Choosing to look a little further at area such as Romford and Dagenham will enable investors to achieve returns of over 5.5%.
South London buy-to-let hotspots
Yields in South London are on average around 6.7%. The area is still relatively close to the centre of the city and it is one of the best buy-to-let areas for investors to invest. Lambeth and Southwark are being given makeovers thanks to regeneration projects and this means that property prices will increase in the future. The return on investment in this area is 31.3% making it a great place to invest.
West London buy-to-let hotspots
For capital gains, the west side of the city offers a lot with property prices increasing by 13.8% since 2010. The borough of Merton is one of the best buy-to-let areas where the rents are expected to increase by 33.8% in over the coming five years. The same can be said for Richmond on Thames which houses some of the most expensive properties in the UK.
North London buy-to-let hotspots
The North of the city has excellent transport links and areas that have solid reputations and this means that property prices will be high. The great thing about this is that rental demand will be high meaning that Islington could see rental costs increase by 33.5% over the next five years while Camden will also see rises of 32.1%.
What to consider
London is city that is diverse and large; therefore, understanding which area to consider can be difficult. There are always new areas being developed which means finding the next place to invest takes research, knowledge and a touch of luck. However, when investing consider transport links to and from the city while schools will be imperative. Think about the local amenities such as bars, shops and restaurants while also considering business areas and universities as all of these are vital to finding the right area.