Islington Buy-to-Let Guide

Like London’s other luxury districts, Islington’s high property prices generally produce a lower gross rental yield. Islington has one of the lowest rental yields compared to other London property investments, estimated to be around 2.88%.

Following overall UK trends, the inadequate supply of housing in London boroughs is exerting upward pressure on rent prices, pushing them up ever higher. The average rent in Islington is around £2,982 PCM, and rents are expected to continue to rise in the near future.

The most common type of property for rent in Islington is a one-bedroom property. The prevalence of one-bedroom apartments implies that childless singles and couples are a common tenancy. On average, homeowners typically skew older, while renters tend to be younger, and Islington follows this trend.

The private rental sector accounts for about 26% of all housing in Islington. These renters often work in professional industries such as finance and real estate, and the number of Islington inhabitants who have completed education to a degree level or equivalent is higher than the UK average. The area attracts affluent professionals who will work within Islington or wider London and are willing to pay higher rents for a convenient and luxurious living location.

Apart from professionals, a buy-to-let investor could also target affluent students as potential tenants. Some of the highest-ranked academic institutions in the world can be found in London, attracting students from around the globe. Despite the high rent, it was estimated that over 20,000 students resided in private rental accommodation in the borough of Islington in 2021.

Consider reading our recently updated guide for a more detailed look at how to start investing in property.

Prices are generally high in Islington, but there are some more affordable areas for those looking to invest in property. Properties closer to central London are generally more costly, such as those in Angel and Clerkenwell, adjacent to Shoreditch.

Further out into the suburbs, however, many in-demand residential areas can be found.

Let’s take a look at these areas in more detail.

Average Property Prices in Holloway

The average property price in Holloway is £673,104.

Average Rental Yields in Holloway

The average rental yield in Holloway is 5.4%.

Central Islington doesn’t offer much in terms of green spaces, so the leafy district of Highbury is highly sought after. This area can offer some advantages in the form of high demand, but the property prices are too excessive to provide a high rental yield on average.

Upmarket residential areas like Barnsbury and Canonbury are popular living places, so the average property price is steep. But certain pockets, such as Barnsbury West, have been identified as much cheaper than the Islington average, which suggests good deals can be found if you choose your location carefully.

Some areas, such as Holloway, are further from the centre of London, meaning the property prices are lower on average. However, the district still has high rents, making an attractive gross rental yield achievable. 

Take a look at our overall UK Area Guide for some insights into the best places to invest in property.

There’s an extreme shortage of available rental properties across London, meaning there is a considerable demand for new-build developments in Islington.

Islington Council has set aside various locations in the borough for new-build housing developments. As mentioned, new housing has also been delivered as part of regeneration schemes.

London is already a top choice for private developers, so there will likely be many new build investment opportunities in Islington. But to have the full selection of the best new-build investment opportunities, it’s worth looking at the whole of London. For up-and-coming London areas, this could include Dagenham new-builds, and while pricey, central London will have diverse investment options on offer.

Properties in upmarket London boroughs are often considered a safe bet for buy-to-let investors due to stable capital growth, high rental income, an almost guaranteed flow of rental demand, and the prestigious reputation of the area.

However, disadvantages include the luxury price tag of Islington property and, subsequently, lower rental yields. The barrier of affordability prevents many investors from considering London, and instead, they turn to other major cities outside the capital. Particularly, locations like the North West can offer higher rental yields and a lower average property price, saving on initial costs.

Alongside this, recent trends suggest that many young professionals are moving up North and other major cities outside of the capital, enticed by the more affordable cost of living. 

Overall, while demand is high in Islington and other parts of London, the same can equally be said of Manchester and Liverpool buy-to-let – with a much smaller price tag.