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% |