Tower Hamlets tops London buy to let yield table

Landlords weighing up where London still pays its way are seeing the strongest gross returns in the east of the capital.

Research by Benham and Reeves puts Tower Hamlets at the top of the table with an estimated gross yield at 6.3%, rising from 5.5% over 12 months.

The firm said the increase was linked to lower property values alongside continued strength in the rent market.

Newham ranked second, with landlords achieving an estimated yield of 6%, up from 5.2% a year earlier.

Opportunities for BTL investors

Marc von Grundherr, a director of Benham and Reeves, said: “London’s rental market continues to provide attractive opportunities for buy to let investors, particularly in boroughs where house price growth has softened while tenant demand remains robust.

“Tower Hamlets and Newham stand out not only because they currently offer the highest rental yields in the capital, but because they have also seen the most significant improvement over the last year.”

He added: “This combination of strong income returns, and positive yield growth is likely to attract increasing investor interest.”

Average gross rent yield

The lettings and estate agent analysed average house prices and average rent values across every London borough, comparing March with March 2025.

Its figures show the average gross rent yield across London now stands at 5%, up from 4.9% a year ago.

Barking and Dagenham follow the top two on 5.6%, ahead of Lambeth at 5.5%.

Hackney and Southwark both delivered 5.1%, while Greenwich reached 5%.

Islington produced a gross yield of 4.9%, Croydon stood at 4.8%, and Enfield and Wandsworth both returned 4.6%.

Lowest yielding boroughs

At the bottom of London’s BTL yield table, Kensington and Chelsea is the lowest-yielding borough at 3.4%, despite a small annual rise.

Richmond-upon-Thames was second lowest at 3.5%, followed by Kingston-upon-Thames at 3.8%.

Tower Hamlets and Newham also posted the strongest annual yield growth, with both boroughs rising by +0.8% over the year.

Lambeth, Wandsworth and Barking and Dagenham each recorded growth of +0.4%.

Barnet, Croydon, Enfield, Hammersmith and Fulham, Richmond-upon-Thames and Westminster all saw increases of +0.3%.

Only two boroughs recorded falls with Brent and Waltham Forest both seeing yields shrink by -0.1%.