Canary Wharf has emerged as the strongest location for landlord returns along the London Marathon route with yields significantly outperforming prime central areas.
Analysis by Rushbrook & Rathbone found that the E14 postcode delivers an estimated average yield of 6.6%, the highest along the route.
The area, which covers miles 15 to 21 of the course and includes the Isle of Dogs and Poplar, combines an average asking price of £475,000 with average monthly rents of £2,600.
Other east and south-east London postcodes also rank highly. SE16, covering Canada Water and Rotherhithe, and E1, which includes Limehouse and Shadwell, both deliver estimated yields of 5.8%. SE18, spanning Charlton and Woolwich, follows at 5.6%.
LOWER RETURNS
However prime central London locations offer lower returns despite commanding higher rents.
WC2, covering Embankment near mile 25, delivers the weakest yield at 3.7%, with average property values of £1.31m offsetting rents of around £4,000 per month.
Similarly, EC3, which includes Tower Hill, delivers a yield of 4.3%, while SW1, covering St James’s and the finish line at The Mall, returns 4.8%.
The data highlights a continued shift in investor focus towards areas offering stronger income returns rather than headline prestige.
STRONGER BALANCE
Roma Sharma (main picture, inset), Managing Director of Rushbrook & Rathbone, says: “Whilst many landlords are naturally drawn to London’s best-known and most prestigious locations, the strongest rental returns are often found elsewhere.
“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.”
