Rental Yields in London: What a Luxury Property Really Earns

The gross number

3–4% gross in prime central; higher outside Zone 1 in London. That is the number to start from, not the number to plan with.

London is bought for legal certainty, currency and proximity to schooling — not for fast growth. Prime central pricing has been broadly flat in real terms for a decade, which is precisely why succession-minded families still buy it.

What comes off the top

Service charges, management fees, letting commission, insurance, maintenance reserve and void periods. In prime markets these routinely absorb a fifth to a third of gross rent, and service charges on branded or amenity-heavy buildings are the most commonly underestimated line.

Tax matters too: higher stamp duty surcharge for overseas buyers; model net returns with uk counsel

Where the demand actually is

Mayfair & Marylebone: Scarcity-led; the deepest ultra-prime demand.

Kensington & Chelsea: Family houses, schools, long-hold owners.

Nine Elms & South Bank: New-build apartments; lettings-led.

How we underwrite it

Ten months of occupancy, three years of comparable evidence, and a resale assumption of flat real pricing. If the case only works on twelve months and rising rents, it is not a case — it is a hope.

Your holding structure decides your tax outcome. Decide it before you make an offer.