Rental Prices Have Increased Across London's Tube Lines, Opening up Investment Opportunities
During the pandemic, many transport links were empty and once-bustling cities were desolate. As a result, rental market values dipped, and yields around the capital were lower.
Post-pandemic, the market has bounced back with decent transport links and a quick commute becoming necessary for many tenants. However, with the increased need for travel, rental prices have soared among London's tube links.
As Stephen Clark, from Finbri bridging finance, say, "With demand in the capital increasing post-pandemic, rental prices have soared, especially in central London where tube lines and transportation are now back to pre-pandemic levels. Buy-to-let developers are now looking for investment opportunities around all the tube lines, including those in Essex, to increase their rental yields."
The most recent market analysis by Rentd has shown that property rental prices in the areas surrounding London Underground stations have climbed by an average of 21% over the past year, with only two stations failing to witness an increase in values.
What is the cost of renting near a tube station?
According to the study's findings, the average cost of renting a property within walking distance of a tube stop currently sits at £2,222 per month, a 21% increase in the last year.
Compared to the annual growth rate of 15% observed in the wider London market, this is a significant difference.
Which area has the most significant rise, broken down by station?
The London Underground rental values have increased the most in the EC4 postcode.
Four stations are located within this postcode, including Mansion House, Monument, Blackfriars, and Cannon Street. Over the past year, the average cost of renting in this neighbourhood has increased by 46%.
Within the IG7 postcode, the average cost of renting has increased by 45% over the last year, making Chigwell and Grange Hill the areas that have witnessed the second most significant increase in rent prices.
The values of rental properties in the neighbourhoods around Pimlico, St. James's Park, Victoria, Sloane Square, Hyde Park Corner, and Westminster are likewise increasing by 39% annually.
Only 0.1% of rent has increased at Manor Park over the last year, while Tottenham Hale (-1 percent) and Chadwell Heath (-5 percent) are the only tube stops to witness a decrease in the cost of renting in the past year. Manor Park had the lowest rate of rental growth.
How much has the rental fee increased by tube line?
With the most robust rental market performance, the Circle line is the most lucrative tube line, with the cost of renting surrounding stations increasing by 28%.
After the Circle line, the Hammersmith and City and District lines have also had some of the highest rises by line, with an increase of 22%. This was followed by the City and Waterloo lines and the Victoria and Bakerloo lines at 21%.
The smallest increase in rental value is the Metropolitan Line has experienced the second-smallest growth, coming in at 15%.
Rentd analysed the local rental market and discovered that, despite the recent inauguration of the Elizabeth line, rentals have only increased by 16 percent annually.