THE latest data and analysis from lettings management platform, Howsy, takes a look at the cost of renting around the M25 and where is best for tenants and landlords based on rental affordability and yields.
While public transport often takes the spotlight in London, the M25 also provides a great way to navigate around the capital and beyond, increasing demand for rental property close to a junction.
Howsy looked at the property markets surrounding each junction of the famous motorway and the average cost of renting, as well as the current average yields available for buy-to-let investors.
North vs South
The firm analysed junctions around the south section of the M25 in relation to the north section and found that the average rent is higher along the southern stretch at £1,524 per month to £1,352 along the northern section. So while tenants should head for the likes of Slough, Watford, Enfield, Epping and Romford for a more affordable M25 rental, those looking to invest in a buy-to-let are better off opting for Leatherhead, Reigate and Sevenoaks. Yields around the southern junctions of the M25 are currently at an average of 4.01% annually, compared to 3.61% along the north side.
The best of the bunch
The cheapest rental option around the M25 is currently junction 31, with the average rent at £1,089 per month. Junction 1B on the southern stretch of the motorway also offers good value for tenants at £1,090 a month, as does junctions 21 (£1,093), 26 (£1,113) and 13 (£1,143).
For buy-to-let investors, junction 31 is the top pick for a rental investment with yields currently hitting 5.43% in the surrounding area. Junctions 9 (5.14%), 30 (4.67%), 1B (4.50%) and 15 (4.45%) are also home to some of the highest rental yields on the M25 ring.
Calum Brannan, Founder and CEO of Howsy, commented: “Despite the endearing title of Britain’s biggest car park, the M25 remains a vital piece of transport infrastructure and while the focus of many tenants in London’s most central boroughs is always the availability of good public transport, the M25 and easy access to it, can be a very valuable selling point for those in the capital’s peripheral areas.
As with any property investment, it’s key factors such as easy transport links that can ensure a sustained level of tenant demand and justify the rental price of a property, which in turn, also helps maintain a healthy rental yield on a property.
It’s interesting to see that unlike central London boroughs, the M25’s southern junctions seem to be the more in demand and home to a higher rental price than the north side, as they provide much quicker routes into the centre of London.”