Top 5 rental hotspots: Areas offering landlords the best yields

With a thriving private rental sector , the UK capital is a sought-after destination amongst local and international property investors. Driven by high demand and consistently growing rents, London’s rental market has outpaced the rest of the country. Rightmove’s most recent update recorded average rents outside London at £1,344pcm, while the capital reported an average of £2,694pcm.

Although central London postcodes command the highest rents, they often do not offer landlords the best yields as most tenants cannot afford the exorbitant asking rents. Therefore, the secret to earning a better yield lies in strategic area selection. Landlords must look at newer neighbourhoods, where regeneration supported by transport and infrastructure upgrades is fuelling rental demand.

In this blog, we delve into five such neighbourhoods in and around London, where landlords can expect the highest yields.

1. Harrow

Located within the Borough of the same name, Harrow is a leafy North West London town offering landlords yields of up to 6.5%, with an 11% growth in annual rents. The area is served by the Underground, Overground and North Western Railways, with direct trains to London Euston in less than 15 minutes. As a family-centric area, there are plenty of open spaces and reputed schools, with 98% of schools being rated ‘Good’ or ‘Outstanding’ by Ofsted.

Developed on the unused site of a century-old Kodak Factory, Eastman Village by Barratt London offers landlords an excellent opportunity to capitalise on Harrow’s increasing demand and earn yields of up to 6.7%. Facilities at the developments include an on-site school, gym, cafe and supermarket with six acres of parkland.

2. Slough

Although geographically outside of London in Berkshire, Slough is strategically located near the intersections of the M4, M40 and M25 motorways. The presence of top corporate firms along the M4 corridor has spurred rental demand amongst professionals working at leading tech companies like Dell, Adobe, Amazon, Nvidia and many more. Offering rental yields of up to 6%, properties in Slough are priced at less than 50% of London’s average.

Just five minutes from Slough Station on the Elizabeth Line, Horlicks Quarter by Berkeley is at the heart of a £3.5bn regeneration investment plan. As a restoration of the iconic Horlicks Factory and Clocktower, this development offers landlords an exciting opportunity to invest in an area just half an hour from Paddington (central London).

3. Southall

As a vibrant West London neighbourhood on the banks of the Grand Union Canal, Southall is emerging as a popular rental destination. The area serves as a link between Heathrow Airport and the M4 corridor, attracting working professionals and families looking for quick connectivity. With average rents over £1,900pcm, Southall recorded one of London’s highest annual rental inflation rate of 12% this year.

Adjacent to Southall Station on the Elizabeth Line and less than 20 minutes from Bond Street, The Green Quarter by Berkeley is a brand-new development offering residents an array of lifestyle amenities. Our on-site branch at this development reported over 35 applicants for every available rental property, with good yields of up to 6%.

4. Bow

Adjacent to popular areas like Stratford and Canary Wharf but slightly more affordable, Bow offers landlords an opportunity to invest in a lively Zone 2 neighbourhood in London’s East End. With rental yields over 5%, the area is sought-after by students, professionals and families looking to rent close to the financial and tech districts of Canary Wharf and the City. Quick access to Westfield Stratford and top university campuses like Queen Mary, UCL, ICL and King’s College are some added benefits of renting in Bow.

A community of over 1,400 homes, Bow Green by Berkeley’s St James is a nature-inspired development with upscale amenities like swimming pools, cinema rooms, water-feature gardens and more. The convenience of three Underground and one DLR station within walking distance from home makes it a top choice for tenants seeking good connectivity.

5. West Ham

Another trendy East London neighbourhood in Zone 2, West Ham is known for its proximity to the famous Queen Elizabeth Olympic Park and quick access to Stratford, Canary Wharf and the City. The area is well-connected to the rest of London via West Ham Station from where commuters can access three Underground lines in addition to the C2C and DLR lines. With average yields of over 5.5%, West Ham offers landlords a chance for good returns on their investment.

Adding to Berkeley’s extensive regeneration portfolio, TwelveTrees Park is a mixed-use masterplan scheme developed across 12 acres of green space that will feature an on-site entrance to West Ham Station. With a massive community of over 3,800 homes, residents can enjoy world-class amenities while landlords benefit from estimated yields of up to 5.7%.

Source: Office of National Statistics (Sep 2024)

Whilst these are some areas offering landlords a chance to earn attractive rental yields, our team of experts are spread out across London bringing you the capital’s finest investment-driven neighbourhoods. Get in touch if you are interested in finding out some more exciting options in London and across the UK.