Where in London has seen the biggest surge in rental returns over the past year?

Rental yields in London have increased over the past 12 months and the signs are that they could rise further moving forward, according to Chestertons.

The letting agent reports that some parts of London have seen rents rise sharply, but what areas have seen the biggest surge in gross rental yields?

According to Chestertons’ research, Chiswick has seen the greatest increase in gross rental yields over the past year, with growth of around 30%, from 3.3% to 4.3%, Tower Bridge and Covent Garden have seen yields increase by 17% and 15% respectively. Both Canary Wharf and Wandsworth have seen an annual growth of 12%.

Other parts of the capital, including Islington, Fulham, Notting Hill, Greenwich, Wandsworth, St John’s Wood and Battersea, have seen a more modest rise of between 6% and 8%.

Richard Davies, head of lettings at Chestertons, said: “There is real a shortage of rental properties in the capital at the moment and there are fewer and fewer [homes] coming onto the market as many landlords have started to react to recent tax changes by restructuring or selling their buy-to-let portfolios. This is leading to severe shortages in many locations, which is in turn leading to increases in rental prices.

“There are several reasons why now is a good time for landlords to invest again. Rents achieved in many areas have increased beyond asking price and gross yields have improved and importantly, tenant demand remains resilient.”

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