hamburger close
Free online valuation Free online valuation
Home Press releasesLandlords & investorsThe London boroughs where rents and yields are still climbing

The London boroughs where rents and yields are still climbing

Devalue-price-down-house

London lettings and estate agent, Benham and Reeves, has revealed which London boroughs have been hardest hit both where rental prices and yields are concerned and which still offer a degree of stability to London landlords.

The ongoing pandemic and a move towards working from home have seen many professional tenants think twice before moving to the capital and this drop in demand has caused rents to fall as landlords struggle to fill their buy-to-let investments.

Benham and Reeves analysed current market data across each London borough, comparing it to rental figures prior to the pandemic.

The figures show that while house prices have climbed since December, the average London rent has fallen -3.1% from £1,697 per month to £1,644. As a result, the average landlord has also seen their rental yield decline by -0.2%.

Camden has seen the largest decline in the average rent, down -9.2%, along with the City of London (-7%), Kingston (-6%), Hounslow (-5.6%) and Hillingdon (-5.5%). Although a total of 16 boroughs have seen rents drop over the course of the year.

The average rental yield has also dropped in a total of 19, with the City of London (-0.7%), Brent (-0.6%) and Camden (-0.4%) seeing the largest declines.

But it’s not all bad news for London landlords as some boroughs have provided a glimmer of hope for an otherwise weary buy-to-let sector in the capital. The average rent in Lambeth has jumped 8.8% so far this year, with Ealing (7.2%), Merton (7.2%), Haringey (7.1%) and Greenwich (5.1%) seeing particularly strong growth.

Greenwich has also seen the largest uplift in yields with a 0.3% increase so far this year, while Southwark, Haringey and Lambeth have also seen a 0.2% increase.

Director of Benham and Reeves, Marc von Grundherr, commented:

“It’s an incredibly tough time for the London rental sector at present with the pandemic bringing a notable decline in the otherwise consistently high levels of rental demand seen in the capital. As a result, many landlords are having to reduce their rental income expectations in an attempt to secure some form of income.

This comes on top of a string of government changes to the sector in recent years that had already dented the profitability of investing in London bricks and mortar. With London’s landlords already forced to operate with extremely fine margins, this latest decline could spur many to reevaluate their buy-to-let activity.

Yes, the declines in rent and yields may seem marginal, but they certainly aren’t in the context of a buy-to-let and it’s imperative that the government does more to help landlords and to support the backbone of the London rental sector.”

Location Pre-Covid (December 2019) Currently (March 2020 – Latest) Change
Average House Price Average Rent Average Rental Yield Average House Price Average Rent Average Rental Yield Rental Change (%) Yield Change (%)
Greenwich £399,718 £1,404 4.21% £394,809 £1,476 4.49% 5.1% 0.3%
Southwark £508,568 £1,654 3.90% £503,092 £1,718 4.10% 3.9% 0.2%
Haringey £562,022 £1,558 3.33% £572,535 £1,669 3.50% 7.1% 0.2%
Lambeth £521,452 £1,754 4.04% £546,470 £1,908 4.19% 8.8% 0.2%
Ealing £468,722 £1,463 3.75% £487,322 £1,569 3.86% 7.2% 0.1%
Westminster £977,456 £3,018 3.71% £963,725 £3,046 3.79% 0.9% 0.1%
Wandsworth £603,511 £1,883 3.74% £616,711 £1,958 3.81% 4.0% 0.1%
Merton £495,862 £1,530 3.70% £524,429 £1,640 3.75% 7.2% 0.1%
Barking and Dagenham £300,828 £1,194 4.76% £302,395 £1,208 4.79% 1.2% 0.0%
Waltham Forest £438,304 £1,309 3.58% £451,537 £1,352 3.59% 3.3% 0.0%
Tower Hamlets £452,262 £1,803 4.78% £461,692 £1,835 4.77% 1.8% 0.0%
Bromley £438,379 £1,321 3.62% £435,535 £1,307 3.60% -1.1% 0.0%
Enfield £398,798 £1,310 3.94% £395,854 £1,292 3.92% -1.4% 0.0%
Croydon £370,174 £1,136 3.68% £376,180 £1,140 3.64% 0.4% 0.0%
Newham £361,669 £1,424 4.72% £373,196 £1,453 4.67% 2.0% -0.1%
Havering £365,810 £1,169 3.83% £371,104 £1,169 3.78% 0.0% -0.1%
Barnet £522,122 £1,523 3.50% £522,846 £1,499 3.44% -1.6% -0.1%
Lewisham £412,085 £1,324 3.86% £417,152 £1,316 3.79% -0.6% -0.1%
Redbridge £420,799 £1,318 3.76% £426,675 £1,311 3.69% -0.5% -0.1%
Hammersmith and Fulham £715,115 £2,117 3.55% £731,718 £2,117 3.47% 0.0% -0.1%
Hackney £549,032 £1,834 4.01% £564,159 £1,842 3.92% 0.4% -0.1%
Sutton £374,018 £1,167 3.74% £383,367 £1,151 3.60% -1.4% -0.1%
Harrow £447,467 £1,407 3.77% £460,179 £1,387 3.62% -1.4% -0.2%
Hounslow £410,851 £1,432 4.18% £407,440 £1,352 3.98% -5.6% -0.2%
Bexley £337,013 £1,106 3.94% £350,938 £1,092 3.73% -1.3% -0.2%
Kingston upon Thames £488,569 £1,390 3.41% £496,801 £1,306 3.15% -6.0% -0.3%
Hillingdon £404,800 £1,270 3.76% £413,445 £1,200 3.48% -5.5% -0.3%
Richmond upon Thames £652,776 £1,857 3.41% £713,067 £1,835 3.09% -1.2% -0.3%
Kensington and Chelsea £1,229,507 £3,053 2.98% £1,368,318 £3,023 2.65% -1.0% -0.3%
Islington £638,872 £1,914 3.60% £736,991 £2,003 3.26% 4.6% -0.3%
Camden £807,868 £2,536 3.77% £812,080 £2,302 3.40% -9.2% -0.4%
Brent £424,851 £1,535 4.34% £487,949 £1,502 3.69% -2.1% -0.6%
City of London £730,374 £2,446 4.02% £814,665 £2,274 3.35% -7.0% -0.7%
London overall £478,879 £1,697 4.25% £489,159 £1,644 4.03% -3.1% -0.2%

Sources: Gov.uk, ONS

Share
avatar

About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 14 international offices.

by