Buy-to-let yields 2021: the best postcodes in London

Landlords May 18, 2021
  • Postcodes in North East London take the top spots for highest rental yields in 2021.
  • The boroughs of Barking & Dagenham, Redbridge, and Havering offer the most attractive opportunities for property investors as they undergo significant urban redevelopment.
  • COVID-19 has changed renter behaviour, with tenants migrating further away from the centre and moving greater distances away from their current home.

We have analysed data from thousands of property listings across London to create an up-to-date guide on buy-to-let rental yields for investors in the capital. Having crunched the numbers for every postcode in Greater London, we have identified the areas that offer the best investment opportunities for buy-to-let landlords.

In the below guide, we provide a rundown of the best performing postcodes for property investors looking to expand their portfolio, while exploring what the data tells us about the current residential lettings market and its prospects in the near future.

Buy-to-let yields        

Since the onset of COVID-19, investors have turned away from many of the asset classes whose presumed security and capacity for long-term value creation were once thought unimpeachable. With international lockdowns accelerating existing trends towards flexible working practices and e-commerce, investors have seen billions wiped off the value of commercial property assets.

However, while commercial property has suffered, the value of residential assets has fared well during the pandemic. Thanks to the extended stamp duty holiday, the sales market is buoyant and price growth has exceeded expectations, while a surprisingly robust lettings market benefited from permission to continue operating during later lockdowns and a flurry of activity as renters seek out housing that more closely aligns with their post-COVID priorities.

While the residential lettings market in London has fared reasonably well despite the pandemic, rental yields in some neighbourhoods have emerged in a far stronger position than others. In particular, postcodes located further away from the city centre (which continues to struggle amid ongoing restrictions) offer the best returns for investors.

Here are the top 10 postcodes in London offering investors the best rental yields for 1, 2, and 3-bedroom properties.

1-bedroom properties

  1. IG11 (Barking, Upney) - 6.12%
  2. N9 (Lower Edmonton) - 5.89%
  3. TW13 (Feltham, Twickenham) - 5.65%
  4. EN8 (Cheshunt, Waltham Cross) - 5.57%
  5. IG1 (Ilford) - 5.56%
  6. EN3 (Enfield) - 5.50%
  7. RM6 (Chadwell Heath, Goodmayes, Marks Gate, Little Heath) - 5.46%
  8. RM1 (Romford) - 5.43%
  9. RM7 (Romford, Dagenham, Hornchurch) - 5.39%
  10. IG2 (Gants Hill, Newbury Park, Aldborough Hatch) - 5.35%

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Jess Brookes

Content & Research Executive at Home Made

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