Graduates moving to London look to live in outer boroughs to ‘reduce rent burden’

Buy-to-let landlords looking to invest in London’s rental market may wish to consider investing in the capital’s outer boroughs where the cost of buying property is generally affordable and the yields on offer rather attractive.

With London’s rental market heating up as thousands of graduates begin their search for a place to live in order to start their first job in the capital, it would appear that a growing number of people are looking for an affordable place to rent.

Graduates renting in London generally tend to spend around half their monthly take home pay on rent, with those living alone faced with spending almost three quarters of monthly net pay, and so perhaps it comes as no surprise that many are looking for a cheaper place to live.

Growing demand for property in outer London boroughs is already starting to impact regions, such as Bexley, Sutton, Havering, Croydon and Bromley, where the most affordable average residential rents of properties can be found.

Bexley, where the average rent currently stands at £1,004 per calendar month, has seen the strongest rental growth of all the boroughs with a 1.98% rise in average rents over the last year, according to the latest Landbay Rental Index, powered by MIAC.

At the other end of the spectrum, prime regions, like Kensington & Chelsea, Westminster, Camden, City of London and Hammersmith & Fulham, which are the most expensive boroughs to rent property in London, have all suffered a fall in demand in both sale and rental markets.

John Goodall, CEO and founder of Landbay, said: “Faced with record high student debt levels and the rising cost of living, it will be little surprise to see graduates starting to look elsewhere from the traditional young professional hot spots such as Fulham and Camden when they come to London.

“Surrounding areas are clearly worth the longer commute to reduce the rent burden and give them any hope of saving for a deposit on a house of their own one day.

“There are of course a number of factors at play, but as returns fall in the more central locations, landlords may look to the outer boroughs to seek more attractive yields.”

Ranking

London Borough

YoY %

Av. £

1

Bexley

1.98%

1,004

2

Sutton

-0.23%

1,056

3

Havering

1.59%

1,072

4

Croydon

0.02%

1,125

5

Bromley

-0.47%

1,169

6

Hillingdon

0.38%

1,192

7

Barking and Dagenham

1.49%

1,203

8

Lewisham

-0.16%

1,232

9

Redbridge

1.08%

1,249

10

Enfield

0.88%

1,252

11

Waltham Forest

1.66%

1,255

12

Kingston upon Thames

-0.77%

1,280

13

Greenwich

-0.33%

1,308

14

Harrow

-0.01%

1,324

15

Hounslow

-0.37%

1,393

16

Haringey

-0.10%

1,398

17

Brent

-0.45%

1,442

18

Ealing

-1.57%

1,461

19

Merton

-0.47%

1,475

20

Newham

-0.42%

1,476

21

Barnet

-1.06%

1,481

22

Richmond upon Thames

-1.00%

1,575

23

Lambeth

-0.07%

1,652

24

Southwark

-0.25%

1,690

25

Wandsworth

-1.46%

1,721

26

Hackney

-1.12%

1,728

27

Tower Hamlets

-1.23%

1,734

28

Islington

-1.31%

1,839

29

Hammersmith and Fulham

-1.67%

1,886

30

City of London

-2.35%

2,074

31

Camden

-1.13%

2,219

32

Westminster

-2.38%

2,891

33

Kensington and Chelsea

-2.36%

3,042


Written by: Houseladder