Average rents in Newham rose by 39 per cent to nearly £1,700 per month. The borough came ahead of the City of London, which recorded strong growth of nearly 32 per cent, partly reflecting a small number of exclusive new penthouses, which raised the overall average.
Rents have also grown significantly in other east London boroughs, including Redbridge (28.0%), Greenwich (24.1%) and Tower Hamlets (18.5%), which make up the top 5. This growth has had a noticeable impact on rental yields, as average house prices have not increased at the same pace. Newham now offers residential investors a return of over 9 per cent and currently tops the table for rental yields across the Capital.
Top 5 London boroughs by rental increase:
- Newham: 39.0%
- City of London: 31.9%
- Redbridge: 28.0%
- Greenwich: 24.1%
- Tower Hamlets: 18.5%
Jennet Siebrits, Head of Residential Research, CBRE, said:
“The rise in average rents in east London reflects the improved desirability of the area as a destination. This has inevitably had a positive impact on rents. A large number of new residential schemes have come to market over the last few years, and renters can now choose from a raft of high quality developments.
Regeneration in Newham, accelerated by the Olympics, has bolstered the rental market by improving infrastructure, increasing jobs and delivering a raft of new cultural and sporting facilities, which is anticipated to increase the area’s appeal for young professionals. Newham houses the youngest population in London, with 41 per cent of residents under the age of 25.
“Redbridge, which not only saw a significant increase in rents but also recorded the highest growth in yields of 40 per cent, has been earmarked as a future destination for Crossrail improving its desirability for city workers. Moreover, it hosts several significant sources of local employment, such as Bombardier and Barnados.”
