London's BTL hotspots with the biggest SDLT saving and strongest rental yields revealed

Property Reporter
22nd July 2020
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The latest data and analysis from London lettings and estate agent, Benham and Reeves, has revealed where to invest in the capital to take best advantage of the stamp duty holiday and secure the biggest rental yields.

According to the latest figures, across the capital, current rental yields averages 3.7%.

Based on the current average house price and rental yield at postcode level, SE17, which covers parts of Lewisham, Southwark and Lambeth, is one of the best buy-to-let options in the current market.

With an average house price in the postcode of £560,120, investors looking to buy now are in line for the maximum stamp duty saving of £15,000.

In addition to this, SE17 is home to the highest yields of all postcodes that present this maximum SDLT saving; with an average rental yield of 4.1%.

SE11 in Kennington and SE15 in Peckham, both also offer the maximum SDLT saving with yields as strong as 4%.

Other postcodes where landlords can secure the maximum £15,000 saving, as well as above-average rental yields, include the IG7, SW9, SE16, E9, SW2, N7 and IG5 postcodes with yields ranging from 3.7% to 3.9%.

There are 16 other London postcodes where landlords can save upwards of £10,000 in SDLT that are also home to above-average yields, while the SE28 postcode in Thamesmead offers the most affordable investment.

The postcode is home to an average house price of just £275,498, and while it also offers the lowest SDLT holiday, landlords can still save £3,775 with the area home to an average yield of 5%.

Other postcodes well below the London average in terms of house price but above it where rental yields are concerned include the DA1, IG11, DA8 and RM10 postcodes.

Marc von Grundherr, Director of Benham and Reeves, commented: “For far too long the government has squeezed the life out of the buy-to-let sector, and so it’s great to see that, finally, there has been some financial breathing room afforded to landlords.

"As the backbone of the UK rental space, landlords are a vital cog in the machine that so many rely on to put a roof over their head. This momentary reprieve where the cost of stamp duty is concerned means that now is a great time to invest for those considering it, those looking to expand their portfolio, and for those that have exited the sector in recent years.

"Not only is there a considerable saving of thousands of pounds in stamp duty on even the most affordable investments, but we’re seeing above-average rental yields the length and breadth of the capital.”

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