By the UKPropertyCalculator team • Published 23 February 2026 • Last reviewed 4 October 2026
Croydon flats yield more than those in the boroughs next door. At today's mortgage rates that is still not enough to make an average purchase pay for itself at 75% loan to value.
Croydon is one of the cheaper ways to buy a rental flat with a fast train into central London, and its flats produce a better gross yield than the same property type in Bromley or Sutton. That part of the usual pitch holds up against the official data.
Two other parts do not. Prices in the borough fell 3.4% in the year to July 2026, so there is no capital growth doing the heavy lifting. And once you put a 5.66% buy-to-let mortgage against the average flat, the rent does not quite cover the costs. An earlier version of this guide rated Croydon a clear buy on a 4.5% mortgage rate. Rates have moved and the conclusion has moved with them.
The Office for National Statistics publishes prices and private rents for every local authority. For Croydon, in its 16 September 2026 release:
| Property type | Average price (July 2026) | Average rent (August 2026) | Gross yield |
|---|---|---|---|
| Flats and maisonettes | £254,000 | £1,437 | 6.8% |
| Terraced | £397,000 | £1,797 | 5.4% |
| Semi-detached | £536,000 | £1,999 | 4.5% |
| Detached | £838,000 | £2,623 | 3.8% |
| All property | £390,000 | £1,582 | 4.9% |
The yield column is our calculation: twelve months of average rent divided by the average price. ONS does not publish yields, and the homes that are rented are not an identical mix to the homes that are sold, so read these as estimates. The ranking is what matters. In Croydon the yield is in the flats, and it falls steadily as the property gets bigger.
By size, average rents were £1,265 for one bedroom, £1,573 for two, £1,858 for three and £2,667 for four or more. Rents across the borough rose 3.2% in the year to August 2026, from £1,534 to £1,582.
| Borough | Avg flat price | Avg flat rent | Gross yield, flats | Price change, 12 months | Rent change, 12 months |
|---|---|---|---|---|---|
| Croydon | £254,000 | £1,437 | 6.8% | −3.4% | +3.2% |
| Bromley | £302,000 | £1,511 | 6.0% | −3.1% | +2.7% |
| Sutton | £284,000 | £1,404 | 5.9% | +0.6% | +2.1% |
Price and rent changes are for all property types in each borough. A Croydon flat costs £48,000 less than one in Bromley and rents for only £74 a month less, which is where the yield advantage of roughly 0.8 percentage points comes from. It is a real edge. It is also much smaller than the gap an earlier version of this guide claimed.
The capital side is the weak part. London as a whole averaged £550,037 in July 2026, down 3.3% on the year, and Croydon fell in line with it. Rising rents on falling prices is the reason the yield looks better than it did. It is not a sign the asset is gaining value.
Take the average Croydon flat at £254,000, let at the average flat rent of £1,437 a month, bought with a 25% deposit in your own name.
| Cash needed to buy | Amount |
|---|---|
| Deposit (25%) | £63,500 |
| Stamp duty, including the 5% additional property surcharge | £15,400 |
| Leasehold conveyancing and a Level 2 survey | about £2,500 |
| Selective licence, where the ward requires one | £800 |
| Total cash in | about £82,200 |
The stamp duty is £2,700 at standard rates plus £12,700 of surcharge, which is 5% of the whole price. That £15,400 is gone on day one and equals about 6% of the purchase.
| Annual income and costs | Amount | Basis |
|---|---|---|
| Gross rent | £17,244 | £1,437 x 12 |
| Void allowance | −£1,990 | Six weeks |
| Letting agent, full management | −£1,831 | 12% of rent collected |
| Maintenance and repairs | −£2,540 | 1% of value |
| Landlord insurance | −£400 | Allowance |
| Gas safety, EICR, compliance | −£300 | Allowance |
| Profit before finance costs | £10,183 | The figure tax is charged on |
| Mortgage interest | −£10,782 | £190,500 at 5.66%, interest only |
| Cash flow before tax | −£599 | About −£50 a month |
The mortgage rate is Moneyfacts' average five-year buy-to-let fix at 75% loan to value. The operating allowances are the same ones used in our buy-to-let ROI guide. They are judgement calls, not published statistics, and you should replace them with your own quotes.
What this leaves out: service charge and ground rent. Flats are almost always leasehold, and a service charge comes straight off the bottom line. There is no reliable borough average to quote, so get the actual figure for the building before you run any numbers. On a tower block it can be the difference between a marginal deal and a clearly bad one.
You cannot deduct mortgage interest from rental income. You are taxed on the £10,183 and then receive a reduction worth 20% of the lowest of three figures: your finance costs, your property profit, or your adjusted total income above the personal allowance.
| Deposit | Loan and rate | Before tax | Basic rate, after tax | Higher rate, after tax |
|---|---|---|---|---|
| 25% (£63,500) | £190,500 at 5.66% | −£599 | −£599 | −£2,636 |
| About 29% (£74,100) | £179,900 at 5.66% | £0 | £0 | −£2,037 |
| 40% (£101,600) | £152,400 at 4.89% | +£2,731 | +£2,185 | +£148 |
At 60% loan to value the average five-year rate drops to 4.89%, and the deal turns positive for a basic-rate taxpayer. A higher-rate taxpayer roughly breaks even after putting in £101,600 of deposit, which is a poor return on that much cash. A limited company deducts interest in full, so the tax problem goes away, but company mortgages are priced differently and the extraction of profits is taxed again. The ROI guide covers that comparison properly.
Croydon Council's 2026 selective licensing scheme covers privately rented homes let to a single household in 14 wards: Addiscombe East, Addiscombe West, Bensham Manor, Broad Green, Fairfield, Norbury and Pollards Hill, Norbury Park, Selhurst, South Croydon, South Norwood, Thornton Heath, Waddon, West Thornton and Woodside. That list includes Fairfield, the ward covering the town centre.
The standard fee is £800, paid as £480 on application and £320 once the application has been assessed. The council lists discounts of £50 for a property rated EPC B or above and £100 for an accredited landlord. Letting without a required licence can lead to a civil penalty notice. Check the ward before you offer, because it changes both the cost and the paperwork.
Since 1 May 2026, section 21 no-fault evictions have been abolished and almost all private tenancies are assured periodic tenancies. Rent can be increased once a year, using the section 13 procedure with at least two months' notice. Landlords and agents cannot ask for more than one month's rent upfront or accept offers above the advertised rent. None of this changes the yield arithmetic, but it does mean a plan that relied on regaining possession at short notice no longer works.
The transport case is the strongest thing Croydon has. Trainline lists the fastest train from East Croydon to London Bridge at 13 minutes, on Thameslink and Southern services, with an average journey of 28 minutes across the day. That is the reason rental demand near the station holds up.
The regeneration case needs more care than it usually gets. The redevelopment of the Whitgift and Centrale shopping centres has been under discussion for more than a decade. The firm facts are these: Croydon's Planning Committee endorsed Unibail-Rodamco-Westfield's masterplan framework for the North End Quarter on 27 February 2025, and the council's announcement said more detailed design work would follow before a planning application is submitted. An endorsed framework is not a planning permission, and it is a long way from a finished town centre. Do not pay a price today that assumes it is built.
It suits a higher-rate taxpayer buying in their own name at 75% loan to value least of all. On the averages, that buyer pays about £2,040 of tax a year on a property that loses money before tax.
Croydon's flats do yield more than their neighbours, about 6.8% gross against 6.0% in Bromley and 5.9% in Sutton, and the trains are as good as the sales pitch says. Those are the reasons to look.
The reasons to be careful are that prices fell 3.4% last year, the average flat loses about £599 a year before tax at 75% loan to value, and that figure is before any service charge. The deal starts to work at around 60% loan to value for a basic-rate taxpayer or inside a company.
Worth buying only below the average price, above the average rent, or with a deposit of 40% or more.
On ONS figures, the average Croydon flat cost £254,000 in July 2026 and the average flat rented for £1,437 a month in August 2026, which is a gross yield of about 6.8%. Across all property types the borough average is about 4.9%, from an average price of £390,000 and an average rent of £1,582.
At the borough averages, not at 75% loan to value. An average flat with a 25% deposit and a 5.66% interest-only mortgage loses about £599 a year before tax after voids, agent fees, maintenance and insurance, and before any service charge. It breaks even before tax with a deposit of about 29%, and at 60% loan to value it makes about £2,731 a year before tax.
In 14 wards, yes. Croydon Council's 2026 selective licensing scheme covers Addiscombe East, Addiscombe West, Bensham Manor, Broad Green, Fairfield, Norbury and Pollards Hill, Norbury Park, Selhurst, South Croydon, South Norwood, Thornton Heath, Waddon, West Thornton and Woodside. The standard fee is £800, paid as £480 on application and £320 once the application is assessed.
Yields are gross and are our own calculation from ONS averages. Worked figures follow from the stated assumptions by standard arithmetic and are illustrative, not a forecast. Void, agent, maintenance, insurance and compliance figures are allowances, not published statistics. This article is for information only and does not constitute financial or investment advice. See our Disclaimer.
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