Best rental returns in London. London remains one of the most sought-after property investment locations globally. For buy-to-let investors looking to maximise returns in 2025, understanding where rental yields are highest is essential. This guide highlights the London areas offering the best rental returns in London, supported by current market data, and explores how regeneration and infrastructure projects are shaping the capital’s rental landscape. 

Understanding Rental Yields in London 

Rental yield is a key metric for buy-to-let investors. It measures the annual rental income relative to the property purchase price. Higher yields indicate better cash flow potential, making certain areas more attractive for investment. While London traditionally commands high property prices, some boroughs still deliver strong rental returns, often due to ongoing regeneration or affordable entry points. 

According to data from Zoopla’s House Price Index, property prices in London have experienced steady growth, but this has not always translated into lower rental yields. Investors should focus on locations where rental demand remains high and supply is constrained. Read on to discover where you can find the best rental returns in London.

Top Areas for the Best Rental Returns in London 2025 

Several London boroughs stand out for delivering the best rental returns in London that exceed the capital’s average. Key locations include: 

1. Barking and Dagenham (IG11) 

Barking and Dagenham offers some of the best rental returns in London, often reaching around 5-6%. This is driven by affordability, making it popular with renters priced out of more central areas. The borough is undergoing significant regeneration, boosting its appeal. The London Economic Action Partnership highlights ongoing investment in the area’s infrastructure and amenities, supporting long-term growth. 

2. Newham (E6, E7) 

Newham benefits from proximity to Canary Wharf and Stratford, two major employment hubs. Rental demand remains strong, and yields are attractive compared to central London. The borough’s regeneration projects, particularly around the Royal Docks, are increasing the area’s desirability. Investors can expect rental yields around 4.5-5%, supported by a growing tenant population. 

3. Croydon (CR0) 

Croydon is increasingly recognised as a key growth area. It offers competitive property prices and strong rental yields, typically around 4.5%. The ongoing development of transport links, including the expansion of the Tramlink network and improved rail connections to central London, underpins rental demand. According to research from JLL UK, infrastructure investment is a significant driver of rental growth in Croydon. 

4. Enfield (EN1) 

Enfield is popular with families and professionals seeking affordable housing with good transport links into central London. Rental yields are around 4.5%, boosted by new housing developments and local regeneration efforts. The borough benefits from a mix of urban and suburban living, appealing to a broad tenant base. 

5. Southwark (SE15) 

Southwark is emerging as a significant opportunity for buy-to-let investors, with rental yields typically exceeding 4.5%. This location is at the heart of one of London’s largest regeneration projects, promising substantial growth in infrastructure, amenities, and employment opportunities over the coming years. An early investment in the SE15 regeneration will allow investors to enter at a below-market value price and yield the best rental returns in London in the coming years

The BeCa, a new development on Old Kent Road, benefits directly from this regeneration wave. Its proximity to major transport links, including Bermondsey and Elephant & Castle stations, offers tenants easy access to central London and Canary Wharf. This accessibility, combined with ongoing improvements such as new parks, retail spaces, and educational facilities, makes Old Kent Road a hotspot for rental demand and capital growth. 

The LandTech Blog highlights how infrastructure improvements significantly boost property values and rental returns, a trend clearly visible in this part of London. 

 

How Regeneration Projects Boost Rental Yields

Regeneration and infrastructure projects are crucial factors driving rental yield growth in London. Areas undergoing redevelopment typically see increased demand for rental properties, as new amenities, transport links, and employment opportunities emerge. 

The LandTech Blog notes that infrastructure projects not only improve quality of life but also enhance property values and rental returns. For example, Crossrail (the Elizabeth Line) has already transformed accessibility in East and South London, positively impacting rental demand in affected areas. 

Investors should pay close attention to planned or ongoing projects, such as new transport stations, commercial developments, and cultural hubs, which signal future rental growth potential. 

London’s Rental Market Outlook for 2025 

The London rental market remains resilient despite economic uncertainties. Data from JLL UK forecasts steady rental growth driven by continued demand from professionals, students, and international tenants. 

High property prices in central London push renters to outer boroughs, sustaining strong demand and attractive yields there. Government data also suggests that population growth and urban migration trends will continue to support rental markets across the capital. 

What This Means for Buy-to-Let Investors 

Investors targeting London buy-to-let opportunities should focus on areas with: 

  • Solid rental demand 
  • Affordable purchase prices 
  • Ongoing or planned regeneration projects 
  • Strong transport links 

Choosing the right location can maximise rental income while building capital growth potential. 

Developments like The BeCa on Old Kent Road are prime examples of properties positioned to benefit from this dynamic market. Its location in SE1 offers access to vibrant regeneration efforts combined with excellent transport connections, making it highly attractive to renters and yielding the best rental returns in London.

Final Thoughts 

The hotspots for the best rental returns in London in 2025 combine affordability with strong demand and regeneration-driven growth. Barking and Dagenham, Newham, Croydon, Enfield, and Old Kent Road in Southwark are among the top choices offering yields of around 4.5% to 6%. Monitoring infrastructure projects and local regeneration will help investors identify emerging opportunities ahead of the curve. 

If you are interested in exploring buy-to-let opportunities in London, including developments like The BeCa, please get in touch with our team for expert advice tailored to your investment goals. 

Contact us today to discuss how London’s rental market can work for you and where you can find the best rental returns in London: TKPG Contact Page