“In short, yes. If you are lucky enough to have the capital, there are still some great places to buy-to-let. In east London, areas within Ilford, Barking and Forest Gate are still achieving extremely healthy >5.5% yields, with some streets and areas even returning a yield of up to 8%*”, answers Mark Lawrinson.
As Portico’s Interactive Yield Map shows, in Chadwell Health in Barking and Dagenham, for example, landlords can achieve a potential 8% yield, and properties along Thames Road in Barking can achieve a potential 7% yield. Transport links are a top priority for tenants, and the area surrounding Barking train station produces a strong 6.5% yield as well as being highly sought-after.
Mark continues, “In west London, areas such as West Drayton, Hounslow and Greenford are showing yields of over 5%, and in certain pockets this rises to over 6%. For example, Southall Green offers a potential 6.1% yield and the Cranford area and roads such as Mornington Crescent can achieve a potential 6.3% yield.”
Though chasing a high yield is important, if you’re after a lucrative investment, it’s also key to invest in areas achieving strong capital growth. Following infrastructure improvements is therefore key – like looking at the new Night Tube route – as with infrastructure comes regeneration, and with regeneration comes property price growth.
The good news for landlords is that both these east and west London pockets are achieving strong capital growth as well as high yields, thanks to the imminent arrival of Crossrail.
Mark comments that, “West Drayton, as an example, is undergoing a huge facelift as a result of Crossrail, and its proximity to west and central London, as well as Heathrow airport makes it a great base for young professionals and those searching for a Pied à Terre. Slightly to the east, though the capital gains aren’t as strong as they were two years ago, Acton is still a hotspot for investors, with plans for a Waitrose to open in the area. And then in east London, Forest Gate and Ilford are becoming the next Bow and Bethnal Green.
Most key investment areas are now in Zones 3 outwards, but if you are keen to buy centrally then Whitechapel and Farringdon are safe bets, again thanks to key infrastructure changes such as Crossrail, the Rail Link and the fact that the silicone roundabout is becoming a great area in which to live, work and play.
For those planning further ahead, look at the Crossrail 2 map, and focus on areas such as Croydon or Wood Green and the “Haringey Ladder” which is primed for regeneration and gentrification.”
Blog post courtesy of Portico London estate agents.