Westminster Apartments Edge Houses on Buy-to-Let Yield

Apartments outyield houses across most bedroom counts in Westminster because flats sit at lower entry prices while monthly rents track location and square footage rather than ownership structure, so a smaller denominator carries a similar numerator. Across the borough, apartments average a holiday-let gross yield of 2.8% against 1.4% for houses, a gap of 1.4%. These are gross figures stated before service charges, ground rent and operating costs, all of which fall heavier on flats than on freehold houses.

The borough's housing stock is overwhelmingly leasehold flats, so the comparison below uses city medians across 75 postcodes from St John's Wood (NW8) through Belgravia (SW1X) to Pimlico (SW1V). Your specific postcode may sit well above or below these midpoints, and a prime mansion block in Knightsbridge prices very differently from a 1960s purpose-built block north of Marylebone Road.

Bedroom-by-Bedroom: Price, Holiday Let and Buy-to-Let Yield

City medians across 75 postcodes. Gross yields before service charges (apartments) and before operating costs.

Warning: holiday let figures apply only where legally permitted. Westminster sits inside Greater London, so the 90-night cap under the Deregulation Act 2015 applies to any property let on a short-term basis without planning permission. Major platforms automatically block bookings beyond 90 nights at a London address.

Why Apartments Edge Houses on Yield, and What Narrows the Gap

The mechanism is arithmetic. A typical 2-bed apartment in Westminster transacts at roughly £863,000, while a 2-bed house runs closer to about £1.87m. Monthly rents on the two property types compress far more than the prices imply, because tenants pay for square footage, address and amenity rather than freehold versus leasehold. The lower denominator on flats converts a similar numerator into a higher gross yield on paper.

That advantage narrows once service charges and ground rent enter the picture. In prime central London, service charges for a standard 2-bed flat typically run from around £5,200 per year upwards, with luxury blocks in Mayfair, Belgravia and along the river demanding considerably more. Lift maintenance, concierge, 24-hour security, communal gardens, plant-room replacement reserves and master insurance all fall on the leaseholder. Houses carry no equivalent standing charge, so the after-charge yield gap is always tighter than the gross figure suggests.

Leasehold structure also creates pure regulatory risk that houses simply do not face. Many Westminster leases prohibit short-term letting outright, regardless of what the borough or central government allows, and freeholders in mansion blocks have grown increasingly aggressive about enforcement. Always read the lease before assuming any holiday-let strategy is available, and remember that the abolition of the Furnished Holiday Lettings tax regime in April 2025 means holiday lets and buy-to-let are now taxed equivalently, making the leasehold restriction even more decisive in the choice between strategies.

The Bedroom Count Curve Moves in Opposite Directions for Each Type

House yields tend to soften as bedroom counts rise in Westminster, because trophy houses at the 4+ bed end of the market are bought as much for legacy ownership and currency hedging as for rental income. Larger freehold homes attract international buyers willing to accept very thin running yields in exchange for a rare, constrained asset. Apartments behave differently: 1-bed and 2-bed flats benefit from the deepest tenant pool in the borough (working professionals, diplomatic staff, corporate lets) while 3-bed and 4+ bed flats compete with houses for family tenants and lose some of the price-to-rent compression that makes smaller flats so efficient.

Treat the 4+ bed row with extra caution. The category bundles 4, 5 and 6+ bedroom listings, and a handful of penthouse or mansion-flat outliers can pull either price or yield around. The buy-to-let column may move in a different direction from the holiday-let column at this end of the market because the 90-night cap is a much harder constraint on a £15m trophy property than on a working 1-bed in Pimlico.

Suburb Variation Inside the Borough Is Wider Than the Borough-vs-UK Gap

City medians smooth over enormous variation between postcodes. Pimlico/Victoria (SW1V) leads the borough on gross yield at 3.3%, with median prices around £1.69m and rents near £4,600, while Whitehall/Buckingham Palace (SW1A) sits at 2.3% on prices closer to about £2.81m. The yield difference between the cheapest and most expensive Westminster postcodes is wider than the difference between Westminster and the UK national median. The dashboard breaks the comparison down to individual postcodes for every bedroom count and property type, so you can test the specific area you are evaluating rather than relying on a borough-level average.

View Westminster in the dashboard → Free preview · every bedroom count and property type

What the Table Does Not Capture

• Service charges and ground rent: Estimated at around £5,200 per year for a 2-bed apartment in Westminster, and frequently much higher in luxury blocks. These are not deducted from the apartment yields above, so the after-charge gap between flats and houses is smaller than the gross gap.
• Capital appreciation: Westminster houses have historically outperformed flats on long-run capital growth because freehold ownership captures land value, while flat values track construction and refurbishment cycles. For a buy-and-hold investor with a 10+ year horizon, this can dwarf the running-yield gap.
• Renovation and reconfiguration optionality: Houses offer extension, basement excavation and reconfiguration potential subject to listed-building and conservation-area constraints. Flats are largely fixed in footprint, and any structural work needs freeholder consent on top of planning.
• Financing constraints: Lenders restrict mortgages on small studio flats, ex-local-authority blocks, short leases (typically under 80 years) and buildings with cladding remediation issues, all of which are common in central London. Houses are easier to finance, although values at the top end of Westminster put many freeholds outside standard buy-to-let mortgage products.
• 4+ bed sample breadth: The 4+ bed category bundles 4, 5 and 6+ bedroom properties, and a small number of trophy listings can pull the median in either direction.

Westminster Is a Premium Appreciation Market, Not a Cash-Flow Market

Westminster's median 3-bed house at about £3.28m sits roughly 419.8% above the London regional median of about £632,000, and is more than twelve times the UK national median of about £254,000. The borough's gross buy-to-let yield of 1.9% sits 3.8pp below the UK national median of 5.7%. This is the classic shape of a prime central London market: investors accept a low running yield in exchange for an asset that overseas buyers hold as a sterling store of wealth, not as a working rental.

If you are buying Westminster for rental yield, you are probably buying the wrong borough. If you are buying for long-run appreciation, currency diversification or legacy ownership, the house generally wins on capital growth and lease simplicity, and the yield shortfall against an apartment is a rounding error against the primary investment thesis. The apartment-versus-house question matters most for investors targeting the working segment of the market (1-bed and 2-bed flats let to professionals) where the yield premium is real, the lease can be checked and the service charge is manageable.

For a contrasting view of how this question plays out under London's 90-night holiday-let cap, After All Costs, Bromley's Holiday Let Loses to Buy-to-Let examines whether short-term letting is even worth pursuing here. After All Costs, Westminster Holiday Lets Trail Buy-to-Let covers the suburb-by-suburb yield ranking inside the borough. The data sources and market score methodology pages explain how the figures above are constructed, and the dashboard lets you explore rental data at the postcode level.

Data reflects market conditions as of May 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.