A good rental yield in London, where property prices are higher than anywhere else in the UK, might be anything over 5%.
In this guide, we explain what rental yield is and how to calculate it, as well as looking at which areas of London have the best yields for landlords.
What is rental yield?
Rental yield tells you what percentage of your property’s value you’re earning in rental income each year.
Essentially, rental yield tells you how profitable your property is against your original investment, so it’s hugely important both when looking at properties to invest in and calculating the ongoing profitability of your existing buy-to-lets.
How to work out rental yield
Working out a property’s gross rental yield couldn’t be simpler.
Take the property’s monthly or projected rental income and multiply by 12 to get your annual rental income.
Then divide that figure by your property’s value or purchase price and multiply by 100 to get your rental yield.
For example:
• Monthly rent of £800 multiplied by 12 = £9,600
• £9,600 divided by a property value of £260,000 = 0.0369
• 0.0369 multiplied by 100 = rental yield of 3.69%
What is a good rental yield in the UK?
Rental yields across the UK fluctuate hugely depending on the area.
In England, the average rental property yield at the end of Q1 of 2021 was 3.2%:
• England average property price (March 2021): £273,486
• England average monthly rent (March 2021): £730
• Average yield: 3.2%
Data from Office for National Statistics (ONS)
Generally, rental yields are higher in places like Manchester and Liverpool, where rental prices are strong, but property prices are below the national average.
In Manchester, for example, the average price of a property inside the M60 motorway was £198,240 in May 2021 and the city’s average monthly rent was £833.
That means an average yield of 5%, although yields upwards of 8% are not uncommon.
In London, where rental prices can be high, but property prices are the highest in the entire country, yields are generally lower than those North West hotspots.
However, it is possible to find yields of above 5% in certain areas of the capital.
The best rental yields in London
London’s average rental yield at the end of Q1 2021 was 3.6% – above the England-wide average:
• Average London property price (end of Q1 2021): £635,306
• Average monthly rent in London (end of Q1 2021): £1,919
• Average yield: 3.6%
Data from Rightmove’s May House Price Index and Q1 Rental Price Tracker
However, as with the rest of England, yields across the capital can fluctuate hugely.
Here are all of London’s rental yields calculated by postcode, using property price and rental price data from Dataloft Inform in June 2021:
Central London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| EC1 | Barbican, Clerkenwell, Finsbury | £744,620 | £1,873 | 3.02% |
| EC2 | Moorgate, Liverpool Street | £865,196 | £2,014 | 2.79% |
| EC3 | Aldgate, Monument, Tower Hill | £653,551 | £1,908 | 3.50% |
| EC4 | Fleet Street, St Paul’s | £644,183 | £1,631 | 3.04% |
| WC1 | Bloomsbury, Gray’s Inn | £910,012 | £1,845 | 2.43% |
| WC2 | Covent Garden, Holborn, Strand | £1,792,859 | £2,363 | 1.58% |
East London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| E1 | Mile End, Stepney, Whitechapel | £534,153 | £1,651 | 3.71% |
| E2 | Bethnal Green, Shoreditch | £531,393 | £1,586 | 3.58% |
| E3 | Bow, Bromley-by-Bow | £469,153 | £1,457 | 3.73% |
| E4 | Chingford, Highams Park | £454,893 | £1,278 | 3.37% |
| E5 | Clapton | £598,723 | £1,543 | 3.09% |
| E6 | East Ham, Beckton | £354,995 | £1,304 | 4.41% |
| E7 | Forest Gate, Upton Park | £443,538 | £1,315 | 3.56% |
| E8 | Hackney, Dalston | £597,878 | £1,794 | 3.60% |
| E9 | Hackney, Homerton | £554,907 | £1,457 | 3.15% |
| E10 | Leyton | £447,492 | £1,306 | 3.50% |
| E11 | Leytonstone | £510,953 | £1,336 | 3.14% |
| E12 | Manor Park | £428,836 | £1,353 | 3.79% |
| E13 | Plaistow | £391,259 | £1,213 | 3.72% |
| E14 | Isle of Dogs, Millwall, Poplar | £550,129 | £1,533 | 3.34% |
| E15 | Stratford, West Ham | £411,433 | £1,444 | 4.21% |
| E16 | Canning Town, North Woolwich | £456,226 | £1,376 | 3.62% |
| E17 | Walthamstow | £495,730 | £1,339 | 3.24% |
| E18 | South Woodford | £514,230 | £1,346 | 3.14% |
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North London rental yields
| Postcode | Areas covered | Average property price | Avg annual rent | Avg yield |
| N1 | Barnsbury, Canonbury, Islington | £762,070 | £1,824 | 2.87% |
| N2 | East Finchley | £990,736 | £1,993 | 2.41% |
| N3 | Finchley Central | £629,246 | £1,413 | 2.69% |
| N4 | Finsbury Park, Manor House | £577,703 | £1,515 | 3.15% |
| N5 | Highbury | £782,447 | £1,756 | 2.69% |
| N6 | Highgate | £1,003,340 | £1,598 | 1.91% |
| N7 | Holloway | £558,341 | £1,548 | 3.33% |
| N8 | Crouch End, Hornsey | £657,888 | £1,442 | 2.63% |
| N9 | Lower Edmonton | £332,063 | £1,228 | 4.44% |
| N10 | Muswell Hill | £748,319 | £1,514 | 2.43% |
| N11 | Friern Barnet, New Southgate | £501,558 | £1,303 | 3.12% |
| N12 | North Finchley, Woodside Park | £550,100 | £1,433 | 3.13% |
| N13 | Palmers Green | £502,878 | £1,329 | 3.17% |
| N14 | Southgate | £606,490 | £1,446 | 2.86% |
| N15 | Seven Sisters | £525,153 | £1,312 | 3.00% |
| N16 | Stamford Hill, Stoke Newington | £629,364 | £1,561 | 2.98% |
| N17 | Tottenham | £404,272 | £1,313 | 3.90% |
| N18 | Upper Edmonton | £327,161 | £1,305 | 4.79% |
| N19 | Archway, Tufnell Park | £645,528 | £1,497 | 2.78% |
| N20 | Totteridge, Whetstone | £726,228 | £1,429 | 2.36% |
| N21 | Winchmore Hill | £600,788 | £1,432 | 2.86% |
| N22 | Alexandra Palace, Wood Green | £536,580 | £1,315 | 2.94% |
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North West London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| NW1 | Camden Town, Regent’s Park | £758,531 | £1,804 | 2.85% |
| NW2 | Cricklewood, Neasden | £569,872 | £1,439 | 3.03% |
| NW3 | Hampstead, Swiss Cottage | £1,131,425 | £2,105 | 2.23% |
| NW4 | Brent Cross, Hendon | £527,848 | £1,396 | 3.17% |
| NW5 | Kentish Town | £707,148 | £1,721 | 2.92% |
| NW6 | Kilburn, Queens Park, West Hampstead | £741,062 | £1,554 | 2.52% |
| NW7 | Mill Hill | £638,429 | £1,519 | 2.86% |
| NW8 | St John’s Wood | £1,089,665 | £1,897 | 2.09% |
| NW9 | Colindale, Kingsbury | £416,285 | £1,353 | 3.90% |
| NW10 | Harlesden, Kensal Green, Willesden | £613,326 | £1,475 | 2.89% |
| NW11 | Golders Green, Hampstead Garden Suburb | £828,438 | £1,676 | 2.43% |
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South East London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| SE1 | Bermondsey, Borough, Southwark, Waterloo | £736,619 | £1,819 | 2.96% |
| SE2 | Abbey Wood | £332,957 | £1,265 | 4.56% |
| SE3 | Blackheath, Westcombe Park | £568,599 | £1,507 | 3.18% |
| SE4 | Brockley, Crofton Park, Honor Oak Park | £566,997 | £1,388 | 2.94% |
| SE5 | Camberwell | £516,456 | £1,544 | 3.59% |
| SE6 | Bellingham, Catford, Hither Green | £431,586 | £1,205 | 3.35% |
| SE7 | Charlton | £467,045 | £1,236 | 3.18% |
| SE8 | Deptford | £434,058 | £1,402 | 3.88% |
| SE9 | Eltham, Mottingham | £420,028 | £1,290 | 3.69% |
| SE10 | Greenwich | £538,467 | £1,504 | 3.35% |
| SE11 | Lambeth | £528,360 | £1,664 | 3.78% |
| SE12 | Grove Park | £434,499 | £1,320 | 3.65% |
| SE13 | Hither Green, Lewisham | £458,516 | £1,288 | 3.37% |
| SE14 | New Cross, New Cross Gate | £481,947 | £1,386 | 3.45% |
| SE15 | Nunhead, Peckham | £549,619 | £1,496 | 3.27% |
| SE16 | Rotherhithe, South Bermondsey, Surrey Docks | £475,590 | £1,516 | 3.83% |
| SE17 | Elephant & Castle, Walworth | £522,599 | £1,703 | 3.91% |
| SE18 | Plumstead, Woolwich | £350,393 | £1,249 | 4.28% |
| SE19 | Crystal Palace, Upper Norwood | £455,225 | £1,311 | 3.46% |
| SE20 | Anerley, Penge | £387,819 | £1,184 | 3.66% |
| SE21 | Dulwich | £711,013 | £1,606 | 2.71% |
| SE22 | East Dulwich | £715,659 | £1,563 | 2.62% |
| SE23 | Forest Hill | £526,360 | £1,327 | 3.03% |
| SE24 | Herne Hill | £755,543 | £1,571 | 2.50% |
| SE25 | South Norwood | £352,403 | £1,058 | 3.60% |
| SE26 | Sydenham | £461,753 | £1,260 | 3.27% |
| SE27 | Tulse Hill, West Norwood | £548,485 | £1,412 | 3.09% |
| SE28 | Thamesmead | £280,329 | £1,128 | 4.83% |
South West London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| SW1 | Belgravia, Pimlico, Westminster | £1,247,473 | £2,410 | 2.32% |
| SW2 | Brixton, Streatham Hill | £554,419 | £1,591 | 3.44% |
| SW3 | Brompton, Chelsea | £1,566,287 | £2,042 | 1.56% |
| SW4 | Clapham | £696,416 | £1,785 | 3.08% |
| SW5 | Earl’s Court | £1,048,197 | £1,822 | 2.09% |
| SW6 | Fulham, Parson’s Green | £940,882 | £1,931 | 2.46% |
| SW7 | South Kensington | £1,502,177 | £2,523 | 2.02% |
| SW8 | Nine Elms, South Lambeth | £676,758 | £1,836 | 3.26% |
| SW10 | Brixton, Stockwell | £1,021,465 | £1,952 | 2.29% |
| SW11 | West Brompton | £691,360 | £1,859 | 3.23% |
| SW12 | Battersea | £818,767 | £1,814 | 2.66% |
| SW13 | Balham | £1,202,996 | £2,110 | 2.10% |
| SW14 | Barnes | £947,237 | £1,869 | 2.37% |
| SW15 | East Sheen, Mortlake | £698,180 | £1,609 | 2.77% |
| SW16 | Norbury, Streatham | £510,667 | £1,329 | 3.12% |
| SW17 | Tooting | £635,768 | £1,619 | 3.06% |
| SW18 | Earlsfield, Wandsworth | £709,024 | £1,740 | 2.94% |
| SW19 | Merton, Wimbledon | £717,231 | £1,539 | 2.57% |
| SW20 | Raynes Park, South Wimbledon | £708,628 | £1,479 | 2.50% |
West London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| W1 | Marylebone, Mayfair, Soho | £1,856,331 | £2,556 | 1.65% |
| W2 | Bayswater, Paddington | £1,015,422 | £1,805 | 2.13% |
| W3 | Acton | £555,717 | £1,421 | 3.07% |
| W4 | Chiswick | £843,631 | £1,649 | 2.35% |
| W5 | Ealing | £670,570 | £1,396 | 2.50% |
| W6 | Hammersmith | £844,430 | £1,687 | 2.40% |
| W7 | Hanwell | £545,280 | £1,530 | 3.37% |
| W8 | Kensington | £1,930,107 | £2,245 | 1.40% |
| W9 | Maida Vale, Warwick Avenue | £769,721 | £1,869 | 2.91% |
| W10 | Ladbroke Grove, North Kensington | £749,467 | £1,517 | 2.43% |
| W11 | Holland Park, Notting Hill | £1,450,633 | £2,025 | 1.68% |
| W12 | Shepherd’s Bush | £646,442 | £1,472 | 2.73% |
| W13 | West Ealing | £668,157 | £1,387 | 2.49% |
| W14 | West Kensington | £837,572 | £1,732 | 2.48% |
Selected outer London rental yields
| Postcode | Areas covered | Average property price | Avg monthly rent | Avg yield |
| EN / N9 | Enfield | £423,019 | £1,241 | 3.52% |
| HA | Harrow | £465,167 | £1,343 | 3.46% |
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Further reading…
• How much you could make as an Instagram home influencer
• The best buy to let areas of London revealed
• Everything landlords can expect from the property market in 2021
