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Quote Ref: WS1

Buy To Let property hotspots – London

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Whatever investors’ fears or concerns about Brexit, London’s property market still remains the best city in the world in which to invest – second only to Los Angeles in the United States. 

What many might see as a surprise ranking made by international investment advisers Schroders, the British capital leapt up from eighth position since the last such survey, according to a report in the Daily Mail’s financial pages on the 26th of June 2017.

How London fares

Schroders investigated all major cities around the world to come up with a list of the top 30 of the most desirable in terms of investment in buy to let property. 

The survey involved a comparison of each city according to a number of factors including:

  • the forecasted growth of the economy over the next ten years;
  • the average disposable incomes of its residents;
  • the size of its population; and
  • for the first time in this year’s survey, the presence of universities in each city and the extent to which these helped to move any one place up or down the rankings. 

Apart from London, cities in the United States – many of them also world-renowned centres of learning – tended to fill many of the spots in the top 30, whilst those slipping out of the major rankings were a number of major cities in China. 

Those investors with a wary eye on attempts by Paris to coax financial services headquarters away from London on the coat-tails of Brexit, might take comfort from the fact that the French capital – Europe’s closest contender to 2nd placed London – stood at a lowly 16th place. Indeed, no other European city, barring London and Paris, made it onto Schroders’ top 30.

Areas in London tipped to enjoy house price growth

Hotspots for buy to let (BTL) investment within the greater London area are as wide and diverse as its population – and reflect an underlying growth in house prices generally, which are forecast to increase by nearly 12% in the next five years, according to London lettings agents Portico.

Areas such as Peckham in south east London, where Del Boy Trotter ran his “business”, is now described by Portico as a place where “arty clubs, gigs, galleries and rooftop bars have lured homebuyers and renters from now expensive Hackney, Hoxton and Dalston. There are proposals to gentrify and modernise the town centre with a new-look square, shopping and housing area in front of Peckham Library.” 

The highest rental yields in Peckham are between 4.8% - 5.4% (depending on which part you buy in). 

On the other side of the river in Forest Gate, the highest rental yield is 5.5%. The imminent arrival of the Crossrail and the area’s close location to the regenerated Stratford, which has all the relevant infrastructure, amenities and nightlife, plus an easy commute in and out of the City, makes this an attractive place to consider investing. 

Top ten places to BTL in London

Current hotspots for buy to let investment are also charted by Portico – and are generally distributed in areas immediately to the east, south and west of central London, but also showing a discernible trend towards more outlying areas, still within the M25 radius, towards the north and north east of the capital.

Of the buy to let London hotspots identified, locations in east and north east London predominate – accounting for no fewer than seven of the top 10 places. Specifically, these include Barking (in first place), Ilford, Dagenham, Edmonton, Canning Town, Beckton and Romford.

Also claiming positions in the top ten were Erith in the south east borough of Bexley, and Ponders End and Freezywater in Enfield in the north east of London. 

All-important yields on buy to let investments are currently achieving between 6.4% in top-rated Barking and 5.6% in Enfield.

Not only do the figures suggest that London is the second most attractive city in the whole world in which to invest in property, but there are parts of the capital which continue to yield more than 6% on that investment – a figure that is likely to be difficult to match through any other kind of investment.