Average buy-to-let yields in Hampstead and Highgate are among lowest in UK
Map showing percentage yield on buy-to-let properties in North London - Credit: Archant
High property prices in the capital mean buy-to-rent yields in London and the south east are the lowest in the country.
The average buy-to-let yield in Sheffield city centre, where the median asking price is £69,005 and monthly rent is an average £645, is the highest in the UK, according to figures from credit comparison site TotallyMoney.com.
The yield in the area’s S1 postcode stands at 11.06 per cent compared to the London average of 3.4 pc.
Figures in prime London postcodes are even lower - a landlord in SW7 (South Kensington) can expect to see the worst return on their investment with an average yield of only 1.56 pc.
Camden postcode NW1 scores only 2.49 pc yield, NW3 (Hampstead) 2.45 pc, and N6 (Highgate) the lowest in this part of London at 2.16 pc.
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These are significantly lower than the national average figure of 4.17 pc.
Will Demare a property consultant at Oliver’s Town, Pond Street said: “People are looking at anything that offers a yield of over 4 pc for buy-to-let. Ex-locals tend to get quite a high yield in London.
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“We’re finding that people are still interested in buying ex-local properties to let out around Kentish Town in particular.”
Kentish Town postcode NW5 performs the best in the area, with an average potential yield of 3.87 pc of investment.
There are currently 305 rental properties in NW5 charging a median rent of £2,015, while the average sale price is £625,000.
High sale prices in N6 (£999,950), NW1 (£1,150,000) and NW3 (£1,350,000) make buying to let a less profitable proposition.
The levels of owner occupation in these postcodes reflect this – 73 pc of Hampstead properties are the owner’s main residence according to Savills data.
However, Sarah Meikle, senior negotiator at Knight Frank in Hampstead says that for those who can afford it, buying to let in prime postcodes is still a good long term investment thanks to the high levels of capital appreciation that will accrue on properties in these areas.
She said: “what we often see is people buying retirement properties to move into in the long term and renting them out until they’re ready to downsize or buying from abroad and living in the property when they are in London.
“People may not buy in volume in prime locations, but certainly if they can afford it people will own multiple properties in the area.”
To see the full interactive map click here
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