Ask where to invest in London and the answer comes back as a list of postcodes. Kensington. Chelsea. Mayfair. Notting Hill. The names are the answer, and they have been the answer for twenty years.
Put a number against them and the order inverts.
We computed gross rental yield for every London borough from two Open Government Licence datasets: median flat prices from HM Land Registry Price Paid Data, and average monthly rents from the ONS Price Index of Private Rents. Annual rent divided by price, nothing else in the formula. Barking and Dagenham is first at 8.66%. At the other end the three names everyone recites come last: City of Westminster 30th at 5.09%, Camden 31st at 5.01%, Kensington and Chelsea 32nd at 4.89%.
The check that matters
A number nobody else publishes is worth nothing if the method is wrong, so here is the arithmetic in full, for you to repeat. Kensington and Chelsea: an average monthly rent of 3,629 pounds for July 2026, times twelve, divided by a median flat price of 890,000 pounds — the midpoint of 985 recorded sales in the twelve months to 30 June 2026 — gives 4.89%. Barking and Dagenham: 1,696 pounds against 235,000 pounds gives 8.66%. Every ratio takes both of its numbers from the same borough, and the same two windows apply to all 32: the price is a twelve-month median of recorded transactions, the rent a single month. Both datasets are published under the Open Government Licence.
The ladder runs 3.77 percentage points from top to bottom.
Why we use the median and not the average
A median is the price of the transaction in the middle. An average is pulled by the tail, and in London the tail is long: one sale at eight figures moves a borough's average and moves nobody's actual purchase. On the average flat price published in the House Price Index, Kensington and Chelsea shows a yield of 4.35%; on the median of what actually changed hands, it shows 4.89%. The second number is the one a buyer can act on, so it is the one this house uses everywhere.
What this ladder does not tell you
It is gross. Stamp duty, service charge, ground rent, voids, management and tax all sit below it. The two figures in each ratio come from different windows — a twelve-month median of recorded sales against a single modelled month of rent — so the ladder compares boroughs against each other and is not the yield of any single property. The ONS figure covers new and existing tenancies and all property types across the borough, while the price is flats only. The City of London is absent from our rent extract and is therefore not on the ladder.
A postcode is a preference. A yield is an arithmetic. Confusing the two is the most expensive thing an investor can do in this market, and it is done every day.
Why the gap persists rather than closing
Yield is a ratio, and in prime London the denominator has been doing the work. Rents in prime central London rose 0.4% in the second quarter of 2026, leaving them 1.5% above a year earlier, on Savills figures. In South West London the equivalent annual figure was 3.6%. Price is what separates the boroughs, not rent: the median flat in Kensington and Chelsea is 890,000 pounds against 235,000 in Barking and Dagenham, a factor of 4, while the rents differ by a factor of 2.1.
A ratio built from a four-times price gap and a two-times rent gap does not converge on its own. But the ladder does not sit still either, and it is worth being precise about which part of it moves. Ranking every London borough on this same ratio for every month since 2016 and comparing every pair of months three years apart, the ends barely move: the top three and the bottom three shift an average of 0.34 of a rung over thirty-six months, and only 0.7% of them move three places or more. The middle churns — from fourth to twenty-ninth the average is 2.94 rungs and 44.5% move three or more. So the names at the bottom of this table are not a snapshot. They have been at the bottom for years.
Reframing what the bottom of the ladder is
Kensington and Chelsea at 4.89% is not an underperforming asset. It is an asset bought for something other than income, priced accordingly, and then measured against a yardstick it was never built to satisfy. The error is not in the borough. It is in reading a capital-preservation asset with an income instrument's ruler, and then being surprised.
The reverse error costs more. Barking and Dagenham at 8.66% is not a better investment because the number is larger. It is a different instrument with different tenant demand, different void risk and different resale liquidity, and the 3.77-point spread is the price of finding out which one you are actually buying.
Gross rental yield by London borough
| # | Borough | Median flat price | Gross yield |
|---|---|---|---|
| 1 | Barking and Dagenham | £235,000 | 8.66% |
| 2 | Havering | £265,000 | 7.08% |
| 3 | Bexley | £265,000 | 6.95% |
| 4 | Enfield | £320,000 | 6.83% |
| 5 | Croydon | £280,000 | 6.78% |
| 6 | Hounslow | £350,000 | 6.67% |
| 7 | Redbridge | £315,000 | 6.57% |
| 8 | Harrow | £325,000 | 6.55% |
| 9 | Merton | £395,000 | 6.54% |
| 10 | Southwark | £450,000 | 6.48% |
| 11 | Lambeth | £470,000 | 6.43% |
| 12 | Tower Hamlets | £455,000 | 6.43% |
| 13 | Sutton | £290,000 | 6.43% |
| 14 | Greenwich | £375,000 | 6.34% |
| 15 | Ealing | £399,950 | 6.26% |
| 16 | Hillingdon | £301,000 | 6.24% |
| 17 | Newham | £375,000 | 6.17% |
| 18 | Barnet | £386,000 | 6.05% |
| 19 | Hackney | £526,000 | 6.03% |
| 20 | Bromley | £335,000 | 6.02% |
| 21 | Wandsworth | £522,500 | 6.02% |
| 22 | Islington | £575,000 | 5.96% |
| 23 | Richmond upon Thames | £470,000 | 5.92% |
| 24 | Lewisham | £375,750 | 5.84% |
| 25 | Brent | £415,000 | 5.82% |
| 26 | Kingston upon Thames | £375,000 | 5.78% |
| 27 | Haringey | £460,000 | 5.77% |
| 28 | Hammersmith and Fulham | £585,000 | 5.74% |
| 29 | Waltham Forest | £400,000 | 5.30% |
| 30 | City of Westminster | £750,000 | 5.09% |
| 31 | Camden | £670,000 | 5.01% |
| 32 | Kensington and Chelsea | £890,000 | 4.89% |
Methodology
rendimento lordo = affitto medio mensile ONS PIPR x 12 diviso prezzo MEDIANO HM Land Registry Price Paid (appartamenti, categoria A), stesso borough; periodi DIVERSI: prezzo 2026-06, affitto 2026-07; riproducibile con intel.scala_rendimenti('2026-06-30','median_ppd','2026-07-01')
Prices: HM Land Registry Price Paid Data, transactions of category A (full market value), property type F (flats and maisonettes), completed between 1 July 2025 and 30 June 2026, one median per borough. Kensington and Chelsea: 985 transactions, median 890,000 pounds. Rents: ONS Price Index of Private Rents, average monthly rent for July 2026. Both read on 2026-08-30.
Third-party research cited, with the report and the date it was consulted:
- Savills — Lettings Spotlight: Market Movements - Q2 2026 (consulted 2026-08-25)
Primary data: HM Land Registry — Price Paid Data and ONS — Price Index of Private Rents, both Open Government Licence v3.0.
Read next in this series
- what a non-resident actually pays to enter, borough by borough
- the 2% surcharge that comes back on a 183-day count
- why the rate moves the plan more than the borough does
Sources
- HM Land Registry — Price Paid Data (Open Government Licence v3.0)
- ONS — Price Index of Private Rents
- Savills — Lettings Spotlight: Market Movements Q2 2026
FAQ
Where should you invest in London property?
On yield, the ranking inverts the usual list. Computed from HM Land Registry Price Paid medians and ONS Price Index of Private Rents, Barking and Dagenham is first at 8.66% and Kensington and Chelsea is last of 32 at 4.89%.
What gross rental yield does London property produce?
Across the 32 London boroughs with both a price and a rent series, the gross yield runs from 8.66% to 4.89%, a spread of 3.77 percentage points.
Is prime central London a good rental investment?
Kensington and Chelsea, Camden and City of Westminster rank last on gross yield: City of Westminster 30th at 5.09%, Camden 31st at 5.01%, Kensington and Chelsea 32nd at 4.89%. They are bought for capital preservation rather than income, and measuring them with an income yardstick produces the wrong answer.
Frequently asked questions
Where should you invest in London property?
On yield, the ranking inverts the usual list. Computed from HM Land Registry Price Paid medians and ONS Price Index of Private Rents, Barking and Dagenham is first at 8.66% and Kensington and Chelsea is last of 32 at 4.89%.
What gross rental yield does London property produce?
Across the 32 London boroughs with both a price and a rent series, the gross yield runs from 8.66% to 4.89%, a spread of 3.77 percentage points.
Is prime central London a good rental investment?
Kensington and Chelsea, Camden and City of Westminster rank last on gross yield: City of Westminster 30th at 5.09%, Camden 31st at 5.01%, Kensington and Chelsea 32nd at 4.89%. They are bought for capital preservation rather than income, and measuring them with an income yardstick produces the wrong answer.