Revealed: Top 10 most profitable areas for landlords in London

 
Oscar Lopez
Kensington And Chelsea Street, Egerton Crescent Named Most Expensive For Second Year Running
The borough of Kensington and Chelsea is London's most profitable. (Source: Getty)

Kensington and Chelsea is the most profitable borough in London, with landlords set to make a net profit of £1.1m over 25 years, according to a study from mortgage lender Kent Reliance.

Westminster is the second most profitable for landlords, according to the analysis, with a net profit of £993,000, followed by Camden at £867,000.

The study also found that across the London rental market, the typical landlord in the capital will see an estimated net profit of nearly £505,000 per property over the next 25 years through rental income and capital gains.

Local authority / Unitary Authority

Initial rental income pa

Total rental income

Total Capital Gains

Total Costs

Total Profit

Profit in Today's Money

Kensington and Chelsea

£48,613

£1,772,409

£1,444,410

£2,116,090

£1,100,729

£670,928

Westminster

£40,757

£1,485,980

£1,210,987

£1,703,380

£993,587

£605,622

Camden

£33,592

£1,224,754

£998,104

£1,355,616

£867,242

£528,611

Hammersmith and Fulham

£30,882

£1,125,939

£917,575

£1,245,489

£798,025

£486,421

Richmond upon Thames

£26,802

£977,177

£796,342

£1,079,697

£693,822

£422,906

Islington

£26,622

£970,609

£790,990

£1,072,378

£689,221

£420,102

Wandsworth

£24,289

£885,556

£721,676

£977,588

£629,644

£383,788

Hackney

£22,073

£804,749

£655,824

£887,531

£573,042

£349,287

Barnet

£22,062

£804,361

£655,508

£887,098

£572,770

£349,121

Haringey

£21,519

£784,584

£639,391

£865,058

£558,917

£340,677

Read more: London’s lack of rental supply is pushing rents up

London’s rental income is nearly twice the national average of £162,000, the study found. Profits from rents in the capital are also more than double the next most lucrative region in the country, the east of England.

The research also factors in an opportunity cost of over £73,000, the return an investor could have made from long-term savings instead.

Read more: Ranked: Best and worst areas for rental growth in England

John Eastgate, sales and marketing director at Kent Reliance's parent group Onesavings Bank, said: “The buy to let market is undergoing a sea change.

“Regulatory and taxation changes have altered the market dynamic, reducing its attractiveness to amateur landlords, and increasing the tax bills of higher-rate investors.

“In spite of rising costs, there are still healthy returns to be found in property for committed investors.”

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