Authored by the expert who managed and guided the team behind the United Kingdom Property Pack
Yes, the analysis of London's property market is included in our pack
If you're a foreigner thinking about buying an apartment in London, one of the first questions you'll ask is: what kind of rental income can I actually expect?
London is one of the world's most expensive cities to buy property, but it also has a huge pool of tenants, so the numbers can work if you understand them.
This article breaks down rental yields, typical rents, best neighborhoods, and all the costs that will affect your bottom line in London in 2026.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in London.
We constantly update this blog post with the latest data available.
What rental yields can I realistically get from an apartment in London?
What's the average gross rental yield for apartments in London as of 2026?
As of early 2026, the average gross rental yield for apartments in London sits around 5.4%, which is a solid planning number if you want a single figure to work with.
In practice, most London apartment investments fall within a gross yield range of 5.0% to 5.8%, depending on where you buy and what type of property you choose.
The main factor that causes gross yields to vary so much across London is the massive price gap between boroughs: a flat in Westminster might cost three times more than a similar one in Stratford, but the rent difference is much smaller, which compresses yields in prime areas.
Compared to other major UK cities like Manchester or Birmingham, London gross yields tend to be lower because property prices here are significantly higher while rents, though also high, don't rise proportionally.
What's the average net rental yield for apartments in London as of 2026?
As of early 2026, the average net rental yield for apartments in London (before mortgage costs and personal income tax) is around 3.3% to 4.3%, with 3.9% being a reasonable planning figure.
Most London apartment investors can realistically expect net yields in the range of 3.0% to 4.5%, depending on how efficiently they manage costs and vacancies.
The single biggest expense that eats into your gross yield in London is the leasehold service charge, which can easily run £2,500 to £4,500 per year in a typical apartment block, and much higher if your building has a concierge, gym, or ongoing major works.
By the way, you will find much more detailed data in our property pack covering the real estate market in London.
What's the typical rent-to-price ratio for apartments in London in 2026?
As of early 2026, the typical rent-to-price ratio for apartments in London is around 0.45% per month, which means if you buy a £500,000 flat, you can expect roughly £2,250 per month in rent.
In reality, most London apartment transactions fall within a rent-to-price ratio range of 0.40% to 0.50% per month, or about 4.8% to 6.0% annualized.
The highest rent-to-price ratios in London tend to appear in well-connected outer boroughs like Newham (Stratford area), parts of Greenwich near the Elizabeth line, and Croydon, where prices remain more affordable but strong transport links keep tenant demand solid.
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How much rent can I charge for an apartment in London?
What's the typical tenant budget range for apartments in London right now?
In early 2026, the typical monthly tenant budget for renting an apartment in London ranges from £1,700 to £3,500 (around $2,100 to $4,400 USD or €2,000 to €4,100 EUR), depending on the size and location.
For tenants targeting mid-range apartments in London, expect budgets of £2,000 to £2,800 per month ($2,500 to $3,500 USD or €2,350 to €3,300 EUR), which typically covers a decent one-bed or a modest two-bed in Zones 2-3.
For tenants seeking high-end or luxury apartments in London, budgets start at £3,500 and can easily exceed £6,000 per month ($4,400 to $7,500+ USD or €4,100 to €7,000+ EUR), especially in prime central areas like Mayfair, Knightsbridge, or Kensington.
We have a blog article where we update the latest data about rents in London here.
What's the average monthly rent for a 1-bed apartment in London as of 2026?
As of early 2026, the average monthly rent for a 1-bed apartment in London is around £2,100 ($2,650 USD or €2,450 EUR), though this varies significantly by borough.
At the entry level, a decent 1-bed apartment in London rents for £1,700 to £1,900 per month ($2,150 to $2,400 USD or €2,000 to €2,200 EUR), and this typically means an older conversion flat in an outer Zone 2 or Zone 3 area like Lewisham or Walthamstow.
In the mid-range, a typical 1-bed apartment in London costs £2,000 to £2,400 per month ($2,500 to $3,000 USD or €2,350 to €2,800 EUR), which usually gets you a modern flat with a lift in areas like Clapham, Bermondsey, or Hackney.
At the high end, a luxury 1-bed apartment in London commands £2,800 to £4,000+ per month ($3,500 to $5,000+ USD or €3,300 to €4,700+ EUR), and this means prime locations like Marylebone, South Kensington, or a high-spec new build in Canary Wharf with concierge and gym.
What's the average monthly rent for a 2-bed apartment in London as of 2026?
As of early 2026, the average monthly rent for a 2-bed apartment in London is around £2,750 ($3,450 USD or €3,200 EUR), making it the most popular size for sharers and young couples.
At the entry level, a decent 2-bed apartment in London rents for £2,300 to £2,500 per month ($2,900 to $3,150 USD or €2,700 to €2,900 EUR), typically an ex-council flat or older building in areas like Tottenham, Woolwich, or Croydon with good transport links.
In the mid-range, a typical 2-bed apartment in London costs £2,600 to £3,100 per month ($3,250 to $3,900 USD or €3,050 to €3,600 EUR), which gets you a well-maintained flat in popular zones like Battersea, Brixton, or Stratford with modern amenities.
At the high end, a luxury 2-bed apartment in London commands £3,500 to £5,500+ per month ($4,400 to $6,900+ USD or €4,100 to €6,400+ EUR), and this means a premium address in areas like Westminster, Chelsea, or a top-floor flat in a Nine Elms tower with river views.
What's the average monthly rent for a 3-bed apartment in London as of 2026?
As of early 2026, the average monthly rent for a 3-bed apartment in London is around £3,500 ($4,400 USD or €4,100 EUR), though family-friendly locations often command a premium.
At the entry level, a decent 3-bed apartment in London rents for £3,000 to £3,300 per month ($3,750 to $4,150 USD or €3,500 to €3,850 EUR), typically a conversion or ex-council property in outer boroughs like Barking, Enfield, or outer Croydon near schools and parks.
In the mid-range, a typical 3-bed apartment in London costs £3,400 to £4,200 per month ($4,250 to $5,250 USD or €4,000 to €4,900 EUR), which usually means a purpose-built flat in family-popular areas like Wandsworth, Greenwich, or Islington with good storage and outdoor space.
At the high end, a luxury 3-bed apartment in London commands £5,000 to £8,000+ per month ($6,250 to $10,000+ USD or €5,850 to €9,350+ EUR), and this means prime family territory like Hampstead, Holland Park, or a penthouse in a Canary Wharf tower with three bathrooms and a terrace.
How fast do well-priced apartments get rented in London?
In early 2026, a well-priced apartment in London typically finds a tenant in about 2 to 3 weeks, with the average sitting around 16 to 23 days depending on the micro-location.
The typical vacancy rate for apartments in London is low, with most well-managed properties experiencing only 2 to 4 weeks of void per year on average when you factor in tenant turnover cycles.
The main factors that cause some London apartments to rent faster than others are proximity to a Tube or Elizabeth line station, a good EPC rating (tenants are very energy-cost conscious now), and whether the flat is furnished for the relocating professional market that dominates inner London.
And if you want to know what should be the right price, check our latest update on how much an apartment should cost in London.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the UK versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
Which apartment type gives the best yield in London?
Which is better for yield between studios, 1-bed, 2-bed and 3-bed apartments in London as of 2026?
As of early 2026, studios and 1-bed apartments typically offer the best gross rental yields in London, followed closely by 2-beds, while 3-beds usually deliver the lowest yields.
Studios and 1-beds in London tend to achieve gross yields of 5.2% to 6.0%, 2-beds typically hit 4.8% to 5.5%, and 3-beds often fall in the 4.3% to 5.0% range due to their higher purchase prices.
The main reason smaller units outperform in London is that rents scale less than proportionally with size (a 2-bed doesn't rent for double a 1-bed), while prices often scale more than proportionally, especially in family-oriented neighborhoods where 3-beds command significant premiums.
Which features are best if you want a good yield for your apartment in London?
The features that most positively impact rental yield in London are walkable proximity to a Tube, Overground, or Elizabeth line station (this is the number one rent driver in the city), a good EPC rating for lower tenant energy bills, and secure bike storage which London renters now expect.
In London apartment blocks, upper floors (but not top floors, which can have heat and leak issues) tend to rent faster because they offer more light and less street noise, which matters a lot in a dense city.
Apartments with balconies or outdoor space definitely command higher rents in London, often 5% to 10% more, and they let much faster since the pandemic made private outdoor space a priority for London tenants.
Building features like lifts, secure entry, and concierge services do raise rents in London, but you need to check that the rent premium covers the higher service charges these buildings typically carry, otherwise your net yield suffers.
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Which neighborhoods give the best rental demand for apartments in London?
Which neighborhoods have the highest rental demand for apartments in London as of 2026?
As of early 2026, the London neighborhoods with the highest rental demand for apartments include Canary Wharf and Isle of Dogs in Tower Hamlets, Shoreditch and Hackney Central in Hackney, London Bridge and Canada Water in Southwark, King's Cross and Camden Town in Camden, and Clapham Junction and Battersea in Wandsworth.
The main demand driver in these neighborhoods is the overlap of major employment hubs (the City, Canary Wharf, Tech City) with excellent transport connections and lifestyle amenities, which creates a constant flow of professional tenants who prioritize commute time over everything else.
In these high-demand London neighborhoods, well-priced apartments typically find tenants in under two weeks, and vacancy rates stay very low because the tenant pool is deep and constantly refreshing with new arrivals to the city.
One emerging neighborhood gaining rental demand momentum in London is Woolwich and Abbey Wood in southeast London, where the Elizabeth line has dramatically improved connectivity and attracted young professionals priced out of more central areas.
By the way, we've written a blog article detailing what are the current best areas to invest in property in London.
Which neighborhoods have the highest yields for apartments in London as of 2026?
As of early 2026, the London neighborhoods with the highest rental yields for apartments include Stratford, Plaistow, and Canning Town in Newham, Woolwich and Abbey Wood on the Greenwich and Bexley border, East Croydon and South Croydon in Croydon, and Tottenham and Seven Sisters in Haringey.
In these top-yielding London neighborhoods, gross rental yields typically range from 5.5% to 6.5%, compared to 4.0% to 5.0% in prime central areas like Westminster or Kensington.
The main reason these neighborhoods offer higher yields than others in London is that purchase prices remain relatively affordable while strong transport links (especially the Elizabeth line and Victoria line) maintain solid tenant demand, so you get decent rents without paying prime-area prices.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the UK. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
Should I do long-term rental or short-term rental in London?
Is short-term rental legal for apartments in London as of 2026?
As of early 2026, short-term rentals are legal for apartments in London, but there is a strict 90-night annual limit for letting your entire home without planning permission.
The main legal restriction for operating a short-term rental apartment in London is this 90-night rule, which applies across all Greater London boroughs and means you cannot do year-round Airbnb-style letting without obtaining specific planning consent from your local council.
If you want to exceed 90 nights per year, you must apply for a change of use from residential (C3) to short-term let, and many London boroughs are now actively enforcing this rule and issuing fines for non-compliance.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in London.
What's the gross yield difference short-term vs long-term in London in 2026?
As of early 2026, short-term rentals in London can achieve headline gross yields of 6% to 8% compared to 5% to 5.8% for long-term lets, but the 90-night rule and extra costs often close this gap in practice.
For short-term rentals in London, the typical gross yield range is 6% to 8% if you can achieve good occupancy, while long-term rentals consistently deliver 5% to 5.8% with much less effort and risk.
The main additional costs that reduce the net yield advantage of short-term rentals in London include professional cleaning between guests (£50 to £100 per turnover), higher utility bills since you pay all usage, platform fees of 3% to 15%, more frequent wear and tear, and potentially higher insurance premiums.
To actually outperform a long-term rental in London, a short-term rental needs to achieve at least 65% to 70% occupancy at competitive nightly rates, which is challenging given the 90-night legal cap unless you have planning permission.
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What costs will eat into my net yield for an apartment in London?
What are building service charges as a % of rent in London as of 2026?
As of early 2026, building service charges for apartments in London typically represent 8% to 18% of your annual rent, or around £2,500 to £4,500 per year ($3,150 to $5,650 USD or €2,900 to €5,250 EUR) for a typical flat.
The realistic range of service charges in London spans from about 6% of rent for a basic low-rise block up to 25%+ for luxury buildings with extensive amenities, so it pays to check the service charge history before you buy.
In London specifically, higher-than-average service charges are typically justified by features like 24-hour concierge, swimming pools or gyms, extensive landscaped communal gardens, and buildings with ongoing major works programs for cladding remediation or lift replacements.
What annual maintenance budget should I assume for an apartment in London right now?
A typical annual maintenance budget for an apartment in London is £1,500 to £3,000 ($1,900 to $3,750 USD or €1,750 to €3,500 EUR), excluding major one-off refurbishments but covering regular upkeep.
The realistic range of annual maintenance costs in London spans from £1,000 for a newer flat in good condition to £4,000+ for an older property requiring more frequent repairs, and you should also keep a reserve for bigger items like boiler replacement or redecoration between tenancies.
The most common maintenance expenses London apartment owners face annually include boiler servicing and gas safety certificates (legally required), appliance repairs or replacements (washing machines and dishwashers fail frequently in rental properties), and periodic redecoration to maintain rental appeal in a competitive market.
What property taxes should I expect for an apartment in London as of 2026?
As of early 2026, the main property-related taxes for a London apartment are Stamp Duty Land Tax (SDLT) when you purchase and income tax on your rental profits, while council tax is typically paid by your tenant during a tenancy.
The range of property taxes in London depends heavily on purchase price and your personal tax situation: SDLT on a £500,000 buy-to-let purchase is around £27,500 (including the 5% additional property surcharge), plus an extra 2% if you're a non-UK resident, totaling up to £37,500 ($47,000 USD or €43,750 EUR).
Property taxes in London are calculated using banded rates for SDLT (starting at 0% up to £125,000, then 2%, 5%, and higher bands), with additional surcharges layered on for second properties (5%) and non-resident buyers (2%).
There are limited property tax exemptions in London, though first-time buyers purchasing their primary residence (not buy-to-let) get SDLT relief on properties up to £625,000, and multiple dwellings relief may apply if you buy several units at once.
If you want to go into more details, we also have a blog article detailing all the property taxes and fees in London.
How much does landlord insurance cost for an apartment in London in 2026?
As of early 2026, typical landlord insurance for an apartment in London costs £250 to £600 per year ($315 to $750 USD or €290 to €700 EUR) for contents and liability cover, assuming buildings insurance is included in your leasehold service charge.
The realistic range of annual landlord insurance costs in London spans from £200 for basic cover on a small flat to £800+ for comprehensive policies on higher-value properties or those including rent guarantee insurance, which protects against tenant non-payment.
What's the typical property management fee for apartments in London as of 2026?
As of early 2026, the typical property management fee for apartments in London is 8% to 12% of monthly rent plus VAT for full management, which on a £2,250 rent means roughly £180 to £270 per month ($225 to $340 USD or €210 to €315 EUR).
The realistic range of property management fees in London spans from 6% for basic rent collection only up to 15%+ for premium full-service management with guaranteed rent schemes, so you need to compare what's actually included.
Standard property management fees in London typically include tenant finding, referencing, rent collection, routine maintenance coordination, and handling tenant queries, while extras like inventory services, tenancy renewals, and major refurbishment oversight often cost additional fees.
We made this infographic to show you how property prices in the UK compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about London, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| ONS Private Rent and House Prices | The UK's official national statistics office publishing standard rent and price data. | We used it to anchor current London rent levels and inflation trends. We also relied on its methodology notes to explain what official rent figures represent. |
| UK House Price Index (GOV.UK) | The official government publication for UK property prices. | We used it to establish London's average purchase price for yield calculations. We cross-checked London figures against borough-level data for accuracy. |
| Paragon Bank Yield Data | A major UK buy-to-let lender with extensive lending book data. | We used their Greater London yield figures to sanity-check our calculations. We also used it to confirm London yields sit below the national average. |
| London Rents Map (City Hall) | The GLA's official tool using ONS rental market data at borough level. | We used it to translate London-wide averages into neighborhood-level rent bands. We also used it to support specific borough examples throughout the article. |
| ONS Housing Prices Local Tool | Official ONS summaries of rent and price levels for each London borough. | We pulled concrete borough examples like Camden, Westminster, and Tower Hamlets. We used paired rent and price figures to illustrate yield differences. |
| GLA London Housing Market Report | Official City Hall report compiling reputable datasets on London housing. | We used it to triangulate asking-rent signals versus stock rent measures. We also used it for market narrative on demand and affordability trends. |
| Rightmove Rental Trends Tracker | The UK's largest property portal with the biggest advertised rents dataset. | We used it to capture new tenancy asking rent levels and market outlook. We used it as a cross-check against ONS figures which include existing tenancies. |
| RICS Service Charge Code | Professional standards body setting UK property management practices. | We used it to frame what service charges typically cover in London blocks. We used it to keep net yield cost categories accurate for leasehold realities. |
| Savills Landlord Services | A major global real estate firm with transparent London fee schedules. | We used it to benchmark realistic property management and letting fees. We built our net yield model using their published fee structures. |
| City of London Short-Term Let Guidance | Local authority explaining official rules for short-term lets in London. | We used it to explain the 90-night rule in plain English. We highlighted why enforcement and planning permission matters for Airbnb investors. |
| AirDNA London Overview | Widely used short-term rental data provider tracking Airbnb performance. | We used it to estimate realistic short-term rental occupancy and nightly rates. We used it only as a cross-check for STR revenue potential. |
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