London’s rental yields are on the road to becoming attractive once again for investors to consider the UK capital for long-term property gains.

According to the market forward indicator from home.co.uk, average rental yields grew between 1.3 per cent and 1.5 per cent at the borough level in London in 2018. Newham experienced the highest growth, as the average rental yield was 4.9 per cent in 2018 compared to 3.6 per cent in 2017.

“This 1.3% increase is the largest rise in any London borough apart from the City of London, where a 1.5% rise was observed. The average rent in Newham is £1,671, up 7.6% on the previous year,” the website said.

In Hammersmith & Fulham, rental yields increased from 3.9 per cent in 2017 to 5.1 per cent last year. Other emerging areas include Hackney and Southwark, where rental yields grew by 0.7 per cent. Outside of the City, Southwark recorded the biggest uplift in rents over 2018, by a whopping 20.2 per cent, with the average rent being £2,532.

There was a 0.6 per cent rise in yields in 2018 in the City of Westminster and Tower Hamlets. Rents in Westminster increased by 12.1 per cent and in Tower Hamlets by 10.1 per cent.

Investors continue to eye the London property market for long-term gains and the rental properties are showing promise.