As we move into the second half of 2025, the London buy-to-let market continues to show resilience and renewed appeal for buy-to-let investors. While the past few years brought economic uncertainty and market fluctuations, current trends suggest that investor confidence is returning, particularly in the capital’s most in-demand zones. 

Backed by strong rental demand, limited housing supply, and long-term growth forecasts, London remains one of the UK’s most competitive cities for buy-to-let property investment. 

Recovery and Resilience in the Capital 

After a period of muted growth in the immediate aftermath of Brexit and the pandemic, the London buy-to-let and the overall property market is stabilising and moving back into positive territory. According to the UK House Price Index from the Office for National Statistics (ONS), London saw an annual price growth of 3.1% in Q1 2025, a marked improvement from the flat performance observed in 2023. 

While growth is more measured than in previous booms, this signals a healthier, more sustainable rise in values, especially in key rental zones across Zones 2–4. Investors are now focusing on medium- to long-term gains, where consistent demand and limited stock are contributing to renewed optimism. 

Rising Rents and Sustained Tenant Demand 

A major driver behind the capital’s appeal to landlords is the strength of the rental market. London rents remain among the highest in Europe, and supply continues to fall short of demand. In its May 2025 report, Zoopla highlighted that UK rents had risen by an average of 6.6% over the past 12 months, with London leading the way in annual growth at 9.2%. 

This surge is primarily due to: 

  • A shortfall in new housing stock 
  • High employment in key sectors (finance, tech, creative) 
  • Continued inward migration of professionals and students 

The imbalance between supply and demand is particularly pronounced in areas such as East London, where regeneration and infrastructure have encouraged renters to seek accommodation beyond the traditional central zones. For landlords, this presents a prime opportunity to benefit from strong rental yields and low vacancy rates in the London buy-to-let market. 

London Rental Yields in 2025 

In the past, London has been seen as a capital growth market more than a yield play. However, this is gradually changing in certain boroughs. According to current Rightmove rental yield data, outer London boroughs and emerging investment zones now offer competitive gross yields of 5–6%, with some regeneration areas exceeding that. 

Top-performing boroughs for rental yield include: 

  • Barking and Dagenham 
  • Newham 
  • Haringey 
  • Waltham Forest 
  • Lewisham 

With continued infrastructure upgrades (such as the Elizabeth line and Overground extensions), areas in East and Southeast London are offering better rental returns alongside steady price growth. 

A Renewed Focus on Affordability 

Despite higher average prices than most of the UK, London still presents good opportunities for value-led investors who know where to look. Many outer boroughs remain significantly more affordable than central zones, yet still benefit from fast transport links and regeneration-led uplift. 

According to the Greater London Authority, the capital is expected to add over 600,000 new residents by 2030. With housing targets not being met and planning pipelines slowing, this will continue to support demand in both the rental and resale markets. 

For investors entering the market now, purchasing in regeneration zones or in early-stage developments allows access to properties before price inflation accelerates further. 

Infrastructure as a Growth Catalyst 

Infrastructure remains one of the most powerful factors driving investor confidence in London. Major completed and upcoming projects are transforming the connectivity and appeal of emerging zones. 

Key highlights include: 

  • Elizabeth Line (Crossrail): Already boosting values in areas such as Ilford, Woolwich, and Abbey Wood 
  • Barking Riverside Extension: Improving access to affordable East London neighbourhoods 
  • Old Oak Common HS2 Hub (under development): Future travel gateway unlocking investment potential in West London 

These projects contribute to the long-term growth story by making previously overlooked locations more accessible and desirable. For investors seeking capital appreciation, proximity to new transport links is a key factor to consider. 

For a deeper dive into how infrastructure impacts values, this analysis by LandTech is particularly useful. 

Who’s Investing in London Buy-to-Lets? 

London remains a global hub for property investors. In 2025, high-net-worth individuals (HNWIs), family offices, and overseas investors continue to see the city as a safe long-term asset, with London buy-to-lets being continuously in demand. 

Notably, overseas buyer interest has picked up again, particularly from Asia and the Middle East. According to the latest JLL data (2025 market summary), more than 35% of new-build purchases in London were made by international buyers in Q1 2025. Their focus? Prime regeneration areas, purpose-built rental schemes, and sustainable developments with strong long-term fundamentals. 

London’s international reputation, combined with the weakness of the pound compared to global currencies, makes London buy-to-lets especially appealing for dollar- and euro-based buyers. 

The Case for London Buy-to-Let in 2025 

With limited rental stock, rising yields, and ongoing tenant demand, London buy-to-let remains a strong market for investors this year. The growth may be slower and steadier than the spikes seen in the past, but it is underpinned by strong fundamentals that will likely outlast short-term market cycles. 

Investors should consider: 

  • Entering regeneration zones where prices remain relatively affordable 
  • Choosing developments close to transport links or new infrastructure 
  • Prioritising tenant-friendly properties (sustainability, broadband, layout) 
  • Working with local experts to identify high-demand areas and secure rental-ready units 

For investors looking for sustainable returns, the London buy-to-let market offers resilience, liquidity, and long-term growth, a combination few cities globally can match. 

Looking to invest in London buy-to-let opportunities in 2025? 
Explore our current listings or contact our team to speak with a London property specialist.