Buy to Let
Peckham offers best yields for landlords
Landlords in south east London enjoyed the best rental yields in the city last year, according to figures from Kinleigh Folkard & Hayward.
Rental yields in Peckham were estimated to reach 6-9%, while yields in Chislehurst, Bromley and Hayes were similarly high. By contrast, landlords in the affluent areas of Belsize Park and Marylebone saw yields of only 3%.
Kinleigh Folkard & Hayward regional sales director for south east London Julian Peak said areas such as Peckham were enjoying considerable growth and investment: “Lenders are still demanding large deposits from buy-to-let investors, and the interest rates charged, despite more schemes becoming available, are still considerably higher than the residential mortgage rates.
“Cash is very much ‘king’ and if a buyer has the deposit there are excellent investment opportunities throughout South East London especially for two bedroom properties.”
Despite the high yields offered by the south east, buy-to-let properties made up less than one in ten of sales in nearly three-quarters of neighbourhoods. The exception was Borough, where half of sales classed as buy-to-let.
The London estate agent’s managing director Lee Watts said: “When it comes to the reasoning behind the purchases, there appears to be a pattern developing.
“The majority of all buy-to-let purchases last year were made by those looking to safeguard their pension. Many are in their 40s, 50s or 60s and see property as offering a better return than bank accounts, bonds or other investment vehicles.”
Area | % of sales BTL | Rental yield | Price increase over 12 months | Rent increase over 12 months |
Borough | 50 | 5-6% | 5-10% | 5% |
Bromley | 10 | 6-8% | 10% | 5-10% |
Chislehurst | 4 | 8% | 13% | N/A% |
Hayes | 2 | 6-8% | 10% | N/A% |
Peckham | 2-4 | 6-9% | 15-20% | 5% |