Croydon Buy-to-Let Guide

According to Rightmove, the average property price in Croydon in late 2023 was £444,854. This is significantly more expensive than the UK average of £287,782, as calculated by the UK House Price Index from HM Land Registry, but more affordable than the figure for London, which was £515,504.

The London property market has been sluggish in recent years, but the overall outlook for the market may show some promise for the future.

Property experts Savills forecast a 17.1% capital value growth for London over the next 5 years to 2029. However, Investors should note that whilst this is a step in the right direction for London’s rental market, this is still the lowest projected growth in the UK, with areas like the North West expected to see 29.4%.

Certain pockets of Croydon are more affordable than others. Zoopla ranks Croydon CR0 as the 13th most affordable postcode in London to buy a home with an average price of £397,000.

The high cost of living in central London is pushing people out of the inner zones and out towards the outskirts, including Croydon. Data from Rightmove last year showed a huge rise in property searches for London outskirts. This included a 228% increase in Coulsdon and a 115% increase for Purley.

Learn More: Discover the latest stamp duty rates for buy-to-let in the UK and what to look for in a buy-to-let property with our updated 2024 guides.

Various property types are available within the Croydon rental market – including terraced and semi-detached properties and flats. However, as mentioned, prices in Croydon are significantly higher than most UK regions, meaning that investors are likely to find greater affordability in alternative markets.

On average, properties in Croydon saw prices of around £448,226 in the last 12 months. Of the total sales recorded, the majority were terraced properties, generating a total average cost of £468,438. Flats saw an average of £286,116, with semi-detached properties totalling £586,318.

Overall, sold prices in Croydon were similar to last year and 6% higher than the 2021 peak of £423,715.

Average Property Prices in Addiscombe

The average property price in this area is £405,925.

Average Rental Yield in Addiscombe

The average rental yield in this area is 4.27%.

Average Property Prices in Purley

The average property price in this area is £577,208.

Average Rental Yield in Purley

The average rental yield in this area is 3.25%.

(Average property prices taken from Rightmove in late 2023, rental yield estimates calculated with figures from housesforsaletorent.co.uk in late 2023)

What is the Best Area of Croydon to Invest in?

Some of the area’s cheapest property can be found in northern parts of Croydon, leading to a more promising rental yield.

For example, Selhurt’s gross average rental yield can be calculated as 4.54%.

Overall, Croydon’s rental yields are lower than other parts of the country, so this can be considered a good yield for the area.

Property can be much more expensive in the outer areas. In the case of Addington, the average can even be higher than the overall London average, making the village less attractive for property investors.

In recent years, there has been a surge in the appeal of newly constructed properties in the UK rental market. With distinct advantages over traditional residential units, these modern developments have captured the attention of landlords and tenants alike.

Due to their brand-new status, these properties demand minimal maintenance and upkeep, allowing a swift transition for new tenants when moving in and enabling investors to see returns on their investments more promptly.

Croydon is a rapidly growing area, with its population expected to exceed 400.000 in the near future. There are many regeneration projects in Croydon with the sole purpose of building new homes to meet this increased demand. The previously mentioned Local Plan requires the town to see around 32,890 new homes by 2036. Through schemes like Brick by Brick, Croydon Affordable Homes and Community-led housing, Croydon hopes to produce affordable and sustainable developments to meet its expanding pool of residents.

Given current market dynamics, opting for new-build properties could present a promising opportunity for many investors.

Yet, while Croydon offers a selection of new-build investment prospects, larger metropolitan hubs like Liverpool and Manchester may boast more expansive investment opportunities.

Read More: Discover more about this investment red with our recent buy-to-let guides, covering everything from new-builds in Preston, RWinvest reviews & the latest UK hotspots!

So, is Croydon the best UK investment for monthly income?

If you’re looking to invest in the London property market, the area may be worth considering.
Croydon has relatively affordable properties and features that make it attractive to potential tenants.

However, other London boroughs have been found to have cheaper property and higher rental yields, so it’s worth looking at good value areas like Bexley, Barking and Dagenham.

London commuter towns have also been rising in popularity recently, with prominent areas like Luton, Slough, and High Wycombe being particularly notable.

But for those looking further afield, much cheaper property and much higher rental yields can be found up north.

As London property prices become increasingly unassailable for many investors, major northern cities are gaining more attention.

For example, Zoopla states that the average rental gross yield in Liverpool is 7.21%, one of the highest in the country, and the average price of a buy-to-let property there is just £127,000, a far cry from the average Croydon property.

As previously mentioned, London is at the bottom of the leaderboard when it comes to regional capital growth projections. Elsewhere, though, Savills predicts regions like the North West (with prominent areas for buy-to-lets in Liverpool and Manchester) will have the highest potential growth – 29.4% by 2029.

Further Reading: Delve further into the UK rental market with RWinvest’s insights into buy-to-let property in Bradford.