"Whilst many landlords are naturally drawn to London's best-known and most prestigious locations, the strongest rental returns are often found elsewhere"
- Roma Sharma - Rushbrook & Rathbone
Canary Wharf has emerged as the strongest postcode along the London Marathon route for landlord returns, with E14 delivering an estimated gross rental yield of 6.6%, according to new analysis by property management firm Rushbrook & Rathbone.
The firm analysed current asking prices and rents across every postcode district spanning the marathon route, calculating estimated gross yields available to landlords in each area. E14, which covers a substantial section of the course from mile 15 through to mile 21, takes in Canary Wharf, the Isle of Dogs and Poplar. Average asking prices across the postcode currently sit at £475,000, with average monthly rents at £2,600.
Two postcodes share second place. SE16, covering Canada Water, Surrey Quays and Rotherhithe between miles nine and 11, returns an estimated yield of 5.8%, as does E1, which spans St Katherine Dock, Limehouse and Shadwell across miles 13, 14 and 22. SE18, covering Charlton and Woolwich at miles two and three, ranks close behind at 5.6%.
The picture reverses sharply in some of London's most well-known locations. WC2, which covers Embankment at mile 25, offers the lowest estimated yield along the entire route at just 3.7%. Average monthly rents there reach £4,000, but average property values of £1.31m significantly erode the return. EC3, covering Tower Hill, delivers 4.3%, while SW1, home to St James's and the finish line on The Mall, returns 4.8%.
"Whilst many landlords are naturally drawn to London's best-known and most prestigious locations, the strongest rental returns are often found elsewhere," said Roma Sharma, managing director of Rushbrook & Rathbone.
"What the marathon route demonstrates is that areas such as Canary Wharf, the Isle of Dogs, Canada Water and Limehouse currently provide a far stronger balance between purchase price and rental income than more expensive prime central London postcodes. Of course, yield is only one part of the investment picture."
"Landlords should also consider tenant demand, long-term capital growth, ongoing management costs and the quality of the local rental market. However, for those looking to maximise their rental return, the strongest opportunities are often found a little further away from the finish line."
