Harlow tops table of commuter towns for buy-to-let returns

Business / Mon 10th Aug 2020 at 02:03pm

THE latest research by lettings management platform, Howsy, has revealed which major London commuter hubs make the most attractive investment for landlords and if they’re better than the London market.

With working from home causing many to look outside of London for a more affordable rental, growing demand for these properties provides an opportunity for buy-to-let investors.

However, as with all rental investments, location is essential and Howsy’s research has revealed that the average rental yield currently sits at just 3.7% across 20 major commuter hubs, lower than the current London average of 4.1%.

Opting for top of the table Harlow (4.6%) over bottom of the table Wycombe (3%), for example, means a difference of 1.6% in the average rental yield.

While Harlow tops the table, Reading also offers very strong buy-to-let potential with the average yield currently at 4.5%.

Luton (4.2%), Crawley (4.2%), Slough (4.1%) and Dartford (4.1%) also offer a current average rental yield at or above the London average of 4.1%.

In contrast, just seven London boroughs are home to a current yield at or above the capital’s average but the majority do sit at the same level or better than the majority of commuter towns.

Tower Hamlets proves the best borough for a buy-to-let investment with yields as high as 4.7%, while Newham (4.5%), Barking and Dagenham (4.4%), Lambeth (4.4%), Greenwich (4.3%), Southwark (4.2%) and Ealing (4.1%) are also performing well.

Founder and CEO of Howsy, Calum Brannan, commented:

“The commuter belt has always been popular amongst tenants searching for rental affordability within touching distance of the capital, but with many now facing more time working from home this trend looks set to intensify.

However, landlords won’t be leaving London for the commuter hills just yet as this demand is yet to have a notable lift on rental prices and, as a result, yields.

Of course, there are already some areas returning a yield above that of the London average, but for the time being at least, the capital remains a stronger market overall when it comes to investing in a rental property.”

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