Over the past decade, East London has emerged as a hotspot for property investors, with several boroughs experiencing significant house price growth. Barking and Dagenham, for instance, saw average house prices rise from £216,631 in 2014 to £343,528 in 2024, marking a 58.58% increase . Similarly, Bexley and Redbridge experienced growth rates of 56.0% and 54.3%, respectively.
This upward trend is attributed to ongoing regeneration projects, improved transport links, and a growing demand for affordable housing options within commutable distances to central London. As property prices in central zones continue to escalate, areas like Barking and Dagenham have become attractive alternatives for both first-time buyers and investors.
Rental yields remain robust
In addition to capital appreciation, landlords in East London have benefited from strong rental yields. In Barking and Dagenham, average monthly private rents increased by 11.7% from £1,403 in March 2024 to £1,568 in March 2025 . This rise outpaces the London-wide average rent increase of 9.1% over the same period.
The combination of rising property values and increasing rental income underscores the profitability of investing in East London’s property market. Landlords have capitalized on the area’s affordability and growth potential, ensuring steady returns on their investments.
Contrasting trends in Prime Central London
While East London thrives, some prime central London boroughs have faced challenges. Kensington and Chelsea, for example, experienced a decline in average house prices, with a 1.5% annual decrease over the past decade, bringing the average to £1.18 million. Westminster also saw a 1.2% annual decline, with average prices now at £921,000.
These declines are attributed to factors such as Brexit-related uncertainties and the introduction of a 2% stamp duty surcharge on foreign investors. Despite these challenges, London remains an attractive destination for international buyers, and the cooling market conditions in prime areas may present new opportunities for savvy landlords and investors.
