Reporting on data from residential property firm Chestertons, LandlordToday has revealed the areas in London that have experienced the biggest surge in gross rental yields over the last year.
According to Chestertons’ research:
- Chiswick has seen the greatest increase in gross rental yields over the past year, with growth of around 30%, from 3.3% to 4.3%;
- Covent Garden and Tower Bridge have seen yields increase by 17% and 15% respectively;
- Wandsworth and Canary Wharf have both seen an annual growth of 12%;
- a more modest rise of between 6% and 8% has been seen in other parts of the capital including Fulham, Notting Hill, Islington, Greenwich, St John’s Wood and Battersea.
MortgageStrategy cites an example where the annual rent in 2017 for a four-bedroom flat in Battersea was £37,200 but this has now increased to £40,320 – equivalent to a rental yield of 5%, and an increase of 14% year-on-year.
A spokesman from Chestertons, said: “There is real a shortage of rental properties in the capital at the moment and there are fewer and fewer [homes] coming onto the market as many landlords have started to react to recent tax changes by restructuring or selling their buy-to-let portfolios. This is leading to severe shortages in many locations, which is in turn leading to increases in rental prices.
“There are several reasons why now is a good time for landlords to invest again. Rents achieved in many areas have increased beyond asking price and gross yields have improved and importantly, tenant demand remains resilient.”