A Guide to Property Investment in Croydon

For the property investor seeking lucrative buy to let opportunities in London, one area that warrants consideration has to be Croydon. With purchase prices in some parts of the London borough lower than much of the rest of the capital, and with yields averaging a healthy 4.5 per cent, plus a host of prime location benefits, it really is worth discovering what property investment in Croydon has to offer.

Croydon forms part of the Greater London area and is the second largest London borough with a population of around 385,000.

What can investors expect from property prices in Croydon?

Looking at investment property for sale in Croydon, whilst Greater London is known to command one of the highest investment levels for buy to let landlords, the fact is that Croydon sits third on the list of cheapest places to buy property.

HM Land Registry data shows that the average property price in Croydon is £367,500. But for those on the lookout for a lower cost investment, there’s a starting price of around £100,000.

Rent wise, the Croydon Market Rent Summary reveals that landlords could command an average rental rate of £1,240 per month. Family homes of three bedrooms average £1,679 and two bedrooms £1,393. Even a one-bed property can achieve £1,066 per month.

Yield wise, investors are looking at 3.9 to 4.8 per cent, according to Liveyield, which compares well to the rest of London.

What attracts tenants to live in Croydon?

Croydon is one of London’s fastest growing economies at 3.7 per cent above average, and is reported to have the second fastest expanding local economy in the whole of the UK. As well as benefiting from considerable investment in the local transport network and billions of pounds worth of regeneration investment, Croydon has also been awarded London Borough of Culture 2023.

Sitting at the northern tip of the Gatwick Diamond, Croydon is a thriving business community and major economic hub for the south east of England offering a significant range of employment opportunities.

There are few places that boast the rich transport links that Croydon does. In fact, this area is one of the best-connected metropolitan zones, served by four railway stations and a number of major road links including the M23, M25 and the A23. Gatwick Airport is just 15 minutes away, and central London just 35 minutes by rail from East Croydon Station.

Amenities and leisure wise, the area is brimming with green spaces, retail, arts and leisure facilities and excellent schools. The London Borough of Culture award will see £1.35 million in funding supporting a year-long programme of events, putting culture at the heart of the community. Plus there’s the Croydon Partnership project, set to inject £1.4 billion into transforming the town into one of the UK’s top ten shopping destinations by 2023.

What type of property is typical in Croydon?

When it comes to investment property for sale in Croydon, there is quite a diverse range on offer.

Central Croydon is generally populated with traditional terraces and a few new build apartment blocks.

North Croydon tends to attract those with a need or desire to live in London, but who are looking for better value. Thornton Heath, South Norwood, Broad Green, Selhurst and Norbury are some of the most popular areas.

Over in East Croydon, in areas such as Addiscombe, Shirley and Long Lane Wood, this is where you’ll find plenty of green space, and further out to Addington the area becomes semi-rural, although transport links certainly don’t suffer courtesy of the London Trams network. Property types here are quite a mixture, ranging from value to high end. Buy to let investors are wise to opt for locations with good access to East Croydon Station and Norwood Junction Station in order to better serve commuting tenants.

Yields in North and East Croydon deliver an average 4.5 – 4.7 per cent yield.

South Croydon and its districts of Coulsdon, Selsdon, Sanderstead and Kenley, and the town of Purley, tend to be semi-rural and quite detached from the traditional London feel. Bordering Surrey, these are some of the more upmarket locations in Croydon. Property types and prices are reflected by this fact. Again, access to stations is beneficial, although proximity to the M25 is a major pull.

Yield wise for South Croydon property investment, you’re looking at around a 4 – 4.3 per cent yield.

West Croydon, including Old Town and Waddon, is a mixed residential and commercial area. Property wise, good value traditional terraces and apartments are typical here.

How to optimise your buy-to-let property investment in Croydon?

If you are considering going down the Croydon property investment route, why not give some thought to protecting your buy-to-let with a guaranteed rent scheme?

This is a full property management service, with an added advantage. Unlike with a traditional property management service, the homes2let guaranteed rent scheme nets you a greater yield, whilst at the same time reducing your investment risk by ensuring your monthly rental payments are made on time every month, even during void periods.

Why not talk to Croydon-based homes2let to learn more? Our helpful team has particular expertise in the Croydon property investment market, and is ready to share a wealth of knowledge to help you get the most out of your rental income. We welcome you to get in touch today.