Top Performing Buy-to-Let Markets in London
capital growth + growing demand = happy landlords
If you're a landlord thinking about where to buy an investment property, it's well worth thinking in more detail about the market and how the property is likely to perform, both in terms of capital growth and income return.
Two things a landlord hopes for when they acquire a buy-to-let property is a growing pool of potential tenants and rising house prices in the local area. We have combined the latest 2011 census data with data from the Land Registry to see which areas have fared best in the last ten years on this basis. If you're impatient, Hackney and Islington came out top. This is great news if you can't afford to buy in Prime Central London, the traditional favourite.
In terms of a growing tenant-base, the best performing areas are those that have seen an increase in the proportion of 20 to 34 year olds, as this is the age bracket most likely to rent. We compared the 2011 and 2001 census' to see how this had changed. As about half of London boroughs have seen positive growth and half negative growth, we drew the line at zero and highlighted areas with positive growth.
Strong house price growth was defined as growth over 7% per annum between 2001 and 2010, using data from the Land Registry. Again, roughly half boroughs sit above 7% and half below.
So the result is that we have identified the seven best performing boroughs: Hackney, Islington, Southwark, Greenwich, Harrow, Hounslow and Brent. Over the last 10 years, landlords in these areas are likely to have experienced most capital growth on their properties and more consistent rental income because of high demand.
What is most important to you when looking for an investment property?