Targeting London’s Zone 2 yield sweet spot
- 8th May 2012
- Property Tips
Buy-to-let properties with good transport links in Zone 2 produce some of the Capital’s best yields.
According to a recent study, London has three areas where rents increased over 10% in the year to March 31:
- Hackney (up 12.1%)
- Lewisham (up 11.8%)
- Lambeth (10.2%)
Stephen Ludlow, Chairman of ludlowthompson, comments: “London buy-to-let properties in Zone 2 have always been attractive because they benefit from lower entry costs for investors even though rents still hold up well.”
Why targeting Zone 2 properties can be an effective buy-to-let strategy:
- “The faster growth in rents for cheaper properties is caused by high demand from tenants looking to save money by renting cheaper properties,” says Stephen Ludlow. “That means that rents for Zone 2 properties can be pushed up even if the jobs market is underperforming.”
- Properties in Zone 2 have a good balance for tenants of convenient local amenities, quick transport to major areas of employment like the City, and a good range of cheap and midrange properties.
- Stephen Ludlow comments: “Crucially, Zone 2 properties cost significantly less to buy than more central properties, but their rents do not fall off as sharply. That equation means good yields for investors.”
London buy-to-let properties in Zone 2 have always been attractive because they benefit from lower entry costs for investors even though rents still hold up well.
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