What are the Best Areas of London to Invest in Buy-to-Let?

London is in the South East of England. Home to some of the most iconic landmarks in the world, from Buckingham Palace, Big Ben, and the London Eye to world-famous museums, including The British Museum and The Natural History Museum. The population of London sits just below 9 million residents across over 32 boroughs. 

Here, we discuss the best areas of London to invest in buy-to-let property.

Why Invest in London Buy-to-Let?

Whether you are looking to invest in luxury houses, family properties, student accommodation, or a contemporary flat, the UK’s bustling capital has a huge amount of prime real estate to offer.

Home to the British monarchy, stunning architecture, and iconic landmarks, London is a major tourist destination, particularly for international visitors. London welcomed 11.2 million arrivals in 2022, which was a significant increase compared to pre-pandemic numbers.

London is expected to receive 41.3% of total international visits to the UK in 2022, making it a highly sought-after destination for investors looking for holiday lets, HMO’s and the like.

Home to 18 universities, London has a thriving student population in areas such as Bloomsbury, Stratford, and Camden – all within close proximity to major universities and boasting a vibrant atmosphere. These universities also provide employment opportunities to the community of London. According to the Russell Group, UCL supports 19,000 full-time jobs across the UK and 11,600 of those are within London.

From Oxford Street and Covent Garden to Westfield shopping centre, London has some of the best shopping areas in the UK. London is home to worldwide luxury shopping destination Harrods and countless designer boutiques and independent shops, there are hundreds of shops to choose from. 

London is one of the world’s media hotspots, home to global names such as the BBC and Google. These organisations bring a large number of employment opportunities to the community of London.

Regeneration projects in London

Various regeneration projects are in progress across London which presents an exciting opportunity for investors. These projects not only contribute to thousands of more affordable homes to buy and rent becoming available to landlords and property investors  but also improve green space. These regeneration projects will also make transport more affordable and support local businesses. Some of these initiatives will offer a variety of options for property investors to invest in buy-to-let properties in up-and-coming areas of London.

Royal Docks and Beckton Riverside

The Royal Docks and Beckton Riverside regeneration projects are one of the various Opportunity Areas in the London Plan. The goal is to provide the community of Newham with 36,300 affordable homes and 55,700 new jobs for the local community.  

An Opportunity Area is defined in the Mayor of London’s Plan as the city’s most significant location for development, providing new housing, commercial development, and infrastructure to improve links to public transport.

This project is part of the Mayor of London’s Good Growth approach. This program is designed to shape a better city by promoting equality and inclusion. This regeneration project will benefit all Londoners, especially investors looking to invest in buy-to-let opportunities.

TwelveTrees Park

TwelveTrees Park is a regeneration project in East London. The project aims to deliver over 3,800 new homes with 50% more green space and will improve transport links to key business and leisure areas across London. This will benefit young professionals who need to utilise public transport to commute to and from work.

This regeneration project aims to offer an abundance of green space, including parkland and private gardens, increasing resident satisfaction.

There will also be resident facilities from a new school, restaurants, and a community centre to a state-of-the-art gymnasium. This modern lifestyle offering for residents of the area will improve the investment potential for buy-to-let investors looking to invest in this part of London.

South Kilburn redevelopment

The regeneration of South Kilburn aims to turn the area into a sustainable and bustling neighbourhood within South London.

This project aims to deliver 2400 homes, improved environmental solutions, and new retail and health facilities for the local community.

Currently, the area is dominated by small flats, but this project aims to deliver a more sustainable combination of housing types, offering investors an opportunity to invest in various properties depending on the choice of tenant.

Things to do in London

As one of the world’s most popular and culturally vibrant cities, there is something for everyone in London. Here are just a tiny snapshot of the things residents and visitors to the city can explore and discover:

• Visit Buckingham Palace: a royal residence home to the British royal family. Learn more about the palace and the history of the royal family dating back to the 9th century.
• Take a walk through Hyde Park: embrace the historic landscape in one of the largest parks in the UK, expanding across 350 acres of land.
• Ride the London Eye: enjoy panoramic views of the city from Europe’s tallest observation wheel.
• Browse the array of museums: learn all about the history of London, the history of the natural world and everything in between in London’s array of museums.
• Oxford Street Shopping: shop til you drop into the famed shopper’s paradise with over 300 stores to choose from.

Transport and accessibility

London has an extensive public transport network with a range of options available for residents and visitors to explore everything the world-famous city has to offer.

• By Rail: trains run directly to multiple areas in London from several destinations around the UK. 
• By Underground: The Underground is a rapid transit system that handles up to five million journeys a day.
• By Bus: there is a fleet of around 9,300 vehicles operating across 675 routes.
• By Road: there are an array of taxis and Ubers to choose from when travelling around London.
• By River: The London River Services licence passenger boat services to transport people across the river.
• By Air: there are multiple airports within and around London from London Gatwick to London Heathrow for residents and visitors to fly into and out of London.
• By Foot: various cycle hire schemes are operating across the streets of London and multiple walking routes.

Property Market Overview

Due to the consistently high demand for properties in highly sought-after areas in London, it remains an attractive area to invest in buy-to-let properties. From its iconic landmarks and extensive public transport system to its historical and educational offerings, it is a highly sought-after area for residents to reside in. If you are looking at investing in a buy-to-let in London, you might like to know that the average price for properties in London was £778,872 as of 2023.

For those looking for an investment in one of the world’s most bustling and well-loved cities, London could be the right choice for your investment with more than 54,000 homes to choose from.

Rental Yield

Due to the high demand for rental properties in London due to the cost of living crisis, many people are faced with not being able to afford to buy property and are therefore having to rely on rental properties for the time being.

According to Zoopla, the average rent in London is around £2,119 pcm following a significant 6.4% increase from the previous year. Although rental prices in the most expensive parts of the city are beginning to slow down, rental prices will likely continue to rise due to the ongoing demand for rental properties.

As an investor, we always recommend carrying out thorough market research before making any investment decisions.

The Best Areas to Invest in Buy-to-Let Property in London

London has an abundance of exciting investment opportunities for you to choose from depending on the type of investment and tenant you are looking for.

North London

Home to just under 1 million residents, North London appeals strongly to commuters due to its fantastic transport links. It is also home to one of the UK’s leading universities, University College London, making it a popular choice for students to reside in.

On average, properties in North London have an overall price of £818,783 in 2023. A large proportion of sales in North London came from flats which sold for around £615,181 with terraced properties selling for an average £1,016,888.

Prices in North London are down by 1% from the previous year, making it an exciting time to invest in a buy-to-let property.

The rental yield in North London sits at around 5% in areas such as Enfield, making it a profitable choice for those looking to invest in buy-to-let properties.

East London 

Retaining the highest population density across London, East London is home to 1.2 million residents. The population has been growing due to large numbers of people overseas beginning to reside here. It is one of the most diverse and multicultural areas in London, making it an incredibly attractive place to live.

Due to the incredibly high population, rental properties have surged significantly in the area. In 2023, properties had an average price of £513, 898 with the majority of sales being flats. The overall price for properties in 2023 was 2% down, making it a good time for investors looking at buy-to-let properties.

The rental yield in East London is high with 5.7% in Thamesmead and 5.6% in Barking and Dagenham. These rental yields promise a good investment in your buy-to-let properties in East London.

South London

Home to the tallest building in the UK, The Shard, South London attracts more families and established professionals looking for a more tranquil scene. Properties had an average price of £762,169 in 2023. 

The rental yield in South London is high with areas such as Southwark boasting a rental yield of 5.6%, making it an enticing opportunity for investors looking to invest in buy-to-let properties.

West London

Home to some of the more affluent areas in London such as Kensington and Chelsea, West London is a highly sought-after location for residents.

Property prices are considerably higher in West London with an average price of £1,264,471 but overall prices were 2% down last year and therefore it could be a good opportunity to invest in buy-to-let properties.

The rental yields for West London are around 3%. Despite this being slightly lower than other parts of London, this area offers a niche opportunity for investors and tenants looking at investing in buy-to-lets in an affluent area of London.

Central London

Central London is at the heart of the city. Properties in Central London have an average price of £1,445,937 however average rent for a property in an area such as Southbank could be around 2400pcm.

Overall prices in Central London are down by 9%, making it a potentially good time to invest in a buy-to-let property here.

Southbank in central London has a high rental yield of 4.9% making it a good option if you are looking to invest in a buy-to-let property in Central London.

Ready to invest in a profitable London buy-to-let?

Investing in a buy-to-let property in London in 2024 presents a good opportunity to yield profit when taking into consideration the high demand for rental properties within London. Whilst there are investment opportunities across London, areas that might be of more desire are across North East London, where rental yield is significantly higher than that of West London.

Moreover, the ongoing regeneration projects that are happening across London particularly in both North and East London make it an extremely exciting time to invest. More affordable housing is being built as well as increasing the green space making for a more desirable location to reside in.

If you are looking to invest in a buy-to-let in London, why not find the best and most affordable insurance for your investment by contacting CIA Landlords today? We are one of the leading insurance brokers in the UK offering unrivalled customer service and deals to our customers.