How to maximise rental returns on London properties as an overseas landlord

If you live overseas but own a property in London and want to maximise your rental income, this guide is for you. Many international landlords, including many from Hong Kong, choose to rent out their properties in the UK. According to a 2024 study by uSwitch, the UK has around 2.82 million local and international landlords, rapidly rising yearly.

Hong Kong investors have beneficial reasons for finding London’s property market attractive. London is a stable and mature investment environment that resonates with Hong Kong investors’ goals of long-term capital growth. As one of the world’s most transparent property markets, London offers Hong Kong investors an attractive entry point into one of the world’s most competitive real estate markets.

In fact, the London rental market has never been more favourable for landlords. Demand stands exceptionally high, with strong rental yields making the capital city a sought-after hotspot for property investment.

Market overview

When writing this, rental rates in London are significantly high, making even compact studio apartments appealing for rental income. A Zoopla April 2024 report states that the average monthly rent for a property in Greater London stood at £2,121 — with properties in Central London pulling in even higher numbers.

At Benham and Reeves, we work year-round with multiple clients seeking solid rental returns from their London properties. Drawing from our experience, we’ll walk you through the best ways to maximise your rental returns on London properties as an overseas landlord.

Strategies to maximise rental returns

1. Ideal location

Invest in redevelopment areas, as this step can enhance rental yields and long-term capital growth. We recommend you consider London neighbourhoods with planned improvements or infrastructure developments.

The second factor to consider is hunting for properties near London’s Underground or Crossrail stations. Such units are particularly attractive to working professionals and students, especially those commuting to work in the city. Reports have further shown that locations close to major transit hubs such as Waterloo or Canary Wharf have steady tenant interest.

2. Maintenance and upgrades

In the long term, most landlords prefer quality tenants. If you also wish for long-term returns, ensure your London property is well-maintained, as it is an essential touch for attracting and retaining tenants. The best way to maintain your property is by conducting regular inspections and prompt repairs.

You can also onboard a professional property management company in London to look into maintenance for your investment property — this step helps avoid vacancies and minimise tenant turnover.

Keeping your kitchens, bathrooms and appliances upgraded significantly boosts rental income. Similarly, energy-efficient upgrades attract more tenants as they help them save on unnecessary utility costs. This feature further allows you to maintain competitive pricing.

3. Furnishings

For better, quicker results, offer your property furnished or partially furnished. Make sure tasteful, practical decor is picked, as this step tends to increase a property’s appeal to renters who prefer a move-in-ready home. Benham and Reeves’ sister company, InStyle Direct, can handle the hassle of furnishing and staging for you.

To market your properties efficiently, invest in a high-quality, professional photo shoot to showcase the property’s best features.

4. HMO for higher yields

A House of Multiple Occupancy (HMO) setup is ideal for maximising rental income from a single property. Shared accommodations are increasingly popular in London, especially among students and working professionals.

Note – HMO conversions require a license renewal every five years. It also entails specific room sizes and tenant capacity requirements.

5. Pricing strategies

Regularly review comparable properties in your area to keep up with market trends. This way, you can ensure your prices are competitive and attract rapid interest. Respond to local demand, as overpricing often leads to extended vacancies. A major instance is rental prices going up at the beginning of new academic years when demand shoots high among students.

6. Professional property management

As a landlord, an essential strategy to pull in the best returns is offering timely responses to tenant inquiries and promptly addressing their concerns. A happy tenant is a beneficial, long-term tenant.

Benham and Reeves’s professional property management services for Hong Kong investors help reduce vacancy periods by efficiently marketing the property, handling tenant screenings and ensuring smooth move-ins and move-outs in London. You can lock in all details and receive timely payments and updates without frequently flying to the UK.

Conclusion

Benham and Reeves, a trusted name in London property investment for over six decades, offers excellent support for discerning investors through its dedicated Hong Kong SAR office – established in 1995. Unlike most firms with affiliations to specific property developers, Benham and Reeves is entirely independent and has always focused solely on finding properties that best match its clientele’s requirements.

Our agents in Hong Kong are fluent in English, Cantonese, Mandarin and Tagalog and ready to offer you a one-stop service for all London property needs — purchasing and selling, seamless property appraisals, legal and mortgage referrals and property management, including rent collection and maintenance — all carried out in-house.

If you’re in Hong Kong and seeking expert assistance in buying, selling or managing your London investment, our specialists are here to provide comprehensive support every step of the way.