Tower Hamlets and Newham are delivering the strongest rental yields for buy-to-let (BTL) landlords in London, according to research from Benham and Reeves.
The analysis found that average rental yields across the capital increased to 5% in March 2026, up from 4.9% a year earlier.
Tower Hamlets currently offers the highest estimated gross rental yield in London at 6.3%, up from 5.5% a year ago.
Newham followed closely behind with a yield of 6%, compared to 5.2% the previous year.
Barking and Dagenham ranks third with a yield of 5.6%, followed by Lambeth at 5.5%. Hackney and Southwark both deliver yields of 5.1%, while Greenwich offers 5%.
The research found that Tower Hamlets and Newham also recorded the largest annual improvements in rental yield, both increasing by 0.8% over the last year.
Lambeth, Wandsworth and Barking and Dagenham each saw yields rise by 0.4%, while Barnet, Croydon, Enfield, Hammersmith and Fulham, Richmond upon Thames and Westminster all recorded gains of 0.3%.
At the other end of the market, Kensington and Chelsea remained the lowest-yielding borough at 3.4%, followed by Richmond upon Thames at 3.5% and Kingston upon Thames at 3.8%.
Marc von Grundherr, director at Benham and Reeves, said: “London’s rental market continues to provide attractive opportunities for buy-to-let investors, particularly in boroughs where house price growth has softened while tenant demand remains robust.
“Tower Hamlets and Newham stand out not only because they currently offer the highest rental yields in the capital, but because they have also seen the most significant improvement over the last year.
“This combination of strong income returns and positive yield growth is likely to attract increasing investor interest.”
He added: “At the same time, traditionally prime markets such as Kensington and Chelsea and Richmond upon Thames continue to generate lower yields due to their higher property values, but these areas always remain attractive for investors seeking long-term capital appreciation rather than immediate rental income.”