Quick answer: Newham is one of East London’s stronger boroughs for headline rental yield, at around 6.0% gross. But it isn’t ahead of every borough in this comparison: Tower Hamlets comes in higher, at about 6.6%. Barking and Dagenham follows Newham at around 5.5%.
That doesn’t decide whether a property is right for you. It does give landlords and anyone considering a buy to let investment a useful starting point, as long as you look beyond the headline percentage.
What is rental yield?
Gross rental yield compares a property’s annual rent with its purchase price:
Monthly rent × 12 ÷ purchase price × 100 = gross yield
For example, a property bought for £300,000 and rented for £1,500 a month would produce £18,000 annual rent. Its gross yield would be 6%.
It’s a quick way to compare prices and rents. It is not your take-home return: the calculation doesn’t account for mortgage interest, repairs, management, service charges, empty periods, tax or buying costs.
Why is Newham attracting attention?
The latest local figures available from the ONS’s Newham housing data show an average house price of about £388,000 in August 2026, down 4.7% year on year. Average private rent was about £1,931 a month in September, up 3.0% over the year.
Put those figures into the yield formula and Newham’s average gross yield is roughly 6.0%.
That combination matters: rents remain close to £2,000 a month while the average purchase price is lower than it was a year earlier. Falling prices can lift the rent-to-price ratio, but they also underline the importance of checking a property’s condition, resale prospects and your own plans before committing.
London’s wider market has also been under pressure. The latest available data indicates London house prices were down 2.2% year on year, with flats down 5.0%. Meanwhile, average London private rent was around £2,338 a month, according to the ONS. These are broad averages, not a forecast for any particular street or property.
A note on timing: As of 10 November 2026, the ONS’s November release had not yet been published. The local figures above are the latest available at the time of writing: August prices and September rents.
How does Newham compare?
These borough-level comparisons use ONS average rents for September 2026 and HM Land Registry average prices for August 2026, as reported in recent local yield comparisons. Yields are approximate and gross.
| East London borough | Average monthly rent | Average price | Approx. gross yield |
|---|---|---|---|
| Tower Hamlets | £2,462 | £447,950 | 6.6% |
| Newham | £1,931 | £388,045 | 6.0% |
| Barking and Dagenham | £1,700 | £369,881 | 5.5% |
| Hackney | £2,667 | £619,408 | 5.2% |
| Waltham Forest | £1,772 | £532,212 | 4.0% |
So, on this like-for-like set of borough averages, Tower Hamlets is ahead of Newham. Newham’s yield is higher than the other three areas shown. That makes it a strong contender, not a guaranteed winner for every investor or property type.
There are also different ways to calculate a borough yield. A GableIndex analysis published on 9 November estimates Newham at 5.32%, using July rents and median sale prices over a rolling 12-month period. That differs from the 6.0% figure above because the dates and price measures differ. Neither number describes what a specific property will earn.
What does the rental market look like?
The Rightmove Q3 2026 Rental Trends Tracker reported record average advertised rents in London of £2,825 a month, up 3.2% year on year. It also found London renter demand was up 6% annually, while available rental listings were down 9%.
Those Rightmove asking rents are not directly comparable with the ONS’s £2,338 average private rent: the datasets measure different parts of the market. Asking-rent data reflects homes being advertised, while ONS figures cover private rents more broadly.
A separate October market report described London asking rents as having risen for a sixth consecutive month. The main takeaway is that demand and limited supply can support rents, but borough-wide trends don’t guarantee quick lets or continued rental growth for an individual home.
Does a 6% yield mean a good investment?
Not by itself. A gross yield is a screening tool, not a profit forecast. Once you account for costs, your net return will be lower. Financing costs also matter: the GableIndex report notes that on 5 November the Bank of England raised Bank Rate to 4%. Bank Rate is not the same as a buy-to-let mortgage rate, but it’s a reminder to test your figures against borrowing costs and possible changes.
Before making an offer, check:
- Achievable rent: Compare similar homes in the immediate area, not just the borough average.
- Total purchase cost: Include tax, legal fees, surveys and any refurbishment.
- Ongoing outgoings: Allow for repairs, insurance, management, service charges and periods without a tenant.
- Mortgage and tax: Model your own borrowing and tax position, and consider how a rate change would affect cash flow.
- The property itself: Condition, layout, lease terms and local tenant demand can all affect performance.
For Stratford and Forest Gate, compare the specific streets and property types you’re considering. Leytonstone is in Waltham Forest, whose borough-wide average yield is lower in this comparison; an individual property may differ, so check its rent and purchase price rather than assuming the borough average applies. A local Stratford estate agent or Forest Gate estate agent can help you understand the evidence for a particular home and its likely rental appeal.
How can a managed service help?
A strong yield depends in part on getting the practical details right: setting a realistic rent, finding suitable tenants, handling maintenance and keeping on top of compliance. That takes time, especially if you’re managing a property from elsewhere or building a portfolio.
Lyss Homes offers a fully managed lettings service with tenant sourcing, day-to-day tenancy management and free Rent Protection and Eviction Cover included. Our team provides hands-on service, transparent pricing and updates to help keep the process smooth and straightforward.
If you’re weighing up a purchase in Stratford, Forest Gate or the wider E-postcodes, or you already own a rental property, we’re here to help you review the local picture. Speak to our team for honest advice, or book a valuation to discuss what your property could rent for.
Figures are area-wide averages and can be revised. Gross yields are before costs, financing and tax; they are not a promise of future returns or financial advice.