Southwark heads London's top 10 investor rental hotspots: HSBC
Due to London's high property prices, its rental yields are relatively modest on the whole.
Southwark with a £401,405 ($A594,800) average price tops the list of boroughs with a yield of 6.15% arising from a £2,058 ($A3050) monthly rental.
Areas in Outer London offer some of the strongest yields in the capital including Newham, Enfield, Brent and Kingston upon Thames.
Just three of the top ten areas are in inner London and each of these is in the East of the city, traditionally the more affordable end of the capital.
Top 10 London Buy To Let Hotspots by Rental Yield
Location | Average Property Price | Average Rent (Monthly) | Rental Yield (gross) |
| £401,405 | £2,058 | 6.15% |
| £229,141 | £1,126 | 5.90% |
| £261,163 | £1,200 | 5.51% |
| £337,723 | £1,517 | 5.39% |
| £333,122 | £1,363 | 4.91% |
| £285,927 | £1,148 | 4.82% |
| £428,987 | £1,694 | 4.74% |
| £283,031 | £1,101 | 4.67% |
| £364,296 | £1,387 | 4.57% |
| £306,381 | £1,148 | 4.50% |
HSBC
Peter Dockar, head of mortgages at HSBC, suggested buy to let remained a good investment for those looking for above average returns.
"Twenty-three of the top 50 areas offer yields above 5%, significantly more than is available from more traditional savings options.
"However, it is clear there is a fine line between a property in a desirable area, the rents that can be achieved and the returns that can be yielded so it is key landlords do their research as often the most popular locations may not offer the best return," he said.