Revolution Brokers has released a new report which shows which cross rail stations currently make the best investment for buy to let. They’ve looked at the average rental yield available in each station postcode to come to create their report.
Average Yield Within a Cross Rail Postcode is 3.7%
In the report, revolution brokers looked at current rental and household market data to find out what the average rental yield for each cross rail postcode is. They also looked at how this has changed compared to the previous calendar year. Conclusions from the research show that on average investment within a cross rail postcode will return an average yield of 3.7%. this is up from 3.4% a year ago. Now that cross rail is open, it will be interesting to see what happens to these rental yields.
Where Are The Best Current Cross Rail Rental Yields?
Reading – at 5.1%. The Reading postcode RG1 is currently the strongest area for buy-to-let investment. However, on the opposite end of the Elizabeth line, East London is also home to some of the strongest yields.
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The E16 postcode, which has the custom house cross rail station currently has an average yield of 4.9%. if you go a little bit further along the line to the E15 postcode, you’ll find the Stratford and Maryland stations. In these areas, you’ll find a respectable yield of about 4.8%,
Moving west again in Southall you’ll find an average rental yield of 4.8%. Canary Wharf and Forest Gate are also high at 4.5%.
Looking at the rest of the top 10 best buy to let investments along the crossrail currently you’ll find Whitechapel at 4.4%, Woolich at 4.3%, Abby Wood at 4.3%, West Drayton at 4.3%, and then Manor Park at 4.3%.
If you look at the W1 postcode in comparison, the average yield is currently just 1.9%. This is home to the Tottenham Court Road and Bond Street cross rail stations and is currently not returning as high a yield as other spots along the Elizabeth line.
Where Is The Growth In Rental Yield?
Forest Gate and Custom House are places to watch. Not only have some of the highest average rental yields but they’ve actually grown the most in the last year and are up 0.8%. This is the highest annual increase across the entire Elizabeth line.
Canary Wharf, Southall, Reading and Whitechapel have also seen strong growth. They are up 0.7% in the last year.
At -0.6% Twyford has seen the largest annual decline while Chadwell Heath, Harold Wood, Romford, Goodmayes, Langley, and Seven Kings have also seen declines but not as significant as Twyford.
Crossrail has been a phenomenal investment for the London capital and has changed the rental yields significantly. It’s not surprising that people want to live along this line as it is shortened commuting times significantly.
Before you jump into purchasing a property, make sure to look at the growth that has already happened in previous years. A friend of Construction Wave bought an apartment back in 2013 in Ealing Broadway (a cross rail station)and saw 50% growth in the following 3 years before selling it. Make sure that the growth hasn’t already happened where you’re looking to buy.