At StayinLondon we get lots of calls from potential investors asking where to invest and where the best ROI and best yield can be generated. That’s why I’ve decided to start a series of articles where I look at specific areas in London and calculate potential returns and compare it to overall investment to find the best deal for prospective investors.
If you’re aiming for a 2-bedroom, 2-bathroom London apartment to rent out on Airbnb or other platforms as a short-term rental, both Southwark and Covent Garden are areas with high demand. First, let’s look at overall London performance in 2024 and 2025:
London Airbnb Market Snapshot (All Listings, All Property Types)
Average Annual Revenue ~£34,000
Average Daily Rate (ADR) ~£142
Average Occupancy Rate ~72%
Average Nights Booked/Year ~263 nights
Top 10% Hosts (Monthly Revenue) £6,300+
Peak Season ADR £160–£190+
Low Season ADR £110–£125
By Property Size (Typical Ranges)
Studio/1-bed - ADR £110-£130, Annual Revenue £25-32k, Occupancy 70-75%
2-bed - ADR £140-£165, Annual Revenue £35-£50, Occupancy 72-78%
3-bed+ - ADR £170-£220, Annual Revenue £45k-£70k+, Occupancy 70-75%
Key Observations
- 2-bedroom units generally perform best for ROI because they balance higher ADR with good occupancy rates.
- Central, tourist-heavy locations (Covent Garden, Camden, South Bank) push ADR into £180+ territory, which boosts annual revenue.
- The London market is seasonal—summer months can achieve ADRs 30–40% above the yearly average, while January and February tend to be the weakest.
Purchase Price Comparison
Southwark
- The average house price in Southwark was approximately £594,000 as of March 2025 (mortgage buyer average around £601,000)  .
- Meanwhile, flats specifically sold over the last 12 months averaged £685,168, with general property values around £713,916 .
- New-build 2-bedroom units in Southwark start from around £475,000, with upper-end prices reaching up to £1,735,000 .
Estimated Typical Purchase Price for a 2-bed:
£600,000 – £700,000.
Covent Garden
- Listings show a wide price range: starting from around £675,000 to £1.5 million, with some luxury penthouses as high as £4 million .
Estimated Purchase Price for a 2-bed:
£700,000 – £1,500,000, with many closer to the £1–1.5 million mark depending on specifics.
Airbnb Revenue Potential
Southwark
- Typical Airbnb (short-term rental) listing earned approximately £32,484 annually in 2023. Average occupancy was 78%, with 285 booked nights/year at an ADR of £123 .
- Another source gives higher estimates: Average revenue £48,700 annually, ADR £191/day, with occupancy around 70% (rising to 81% in peak months) .
Estimated Airbnb Revenue Range:
£32,000 – £48,700 per year.
Covent Garden
- Airbnb annual revenue per listing is approximately £95,545, with an occupancy rate of 82% and average daily rate around £316  .
- Another source confirms £94.3K annual revenue, with ADR around £355 and a RevPAR surge of 49% year-on-year .
Estimated Airbnb Revenue:
£94,000 – £95,500 per year.
Metric
Purchase Price
Southwark (2-Bed) £600k – £700k
Covent Garden (2-Bed) £700k – £1.5m (often £1–1.5m)
Annual Airbnb Revenue
Southwark (2-Bed) £32k – £48.7k
Covent Garden (2-Bed) £94k – £95.5k
ADR (Avg Daily Rate)
Southwark ~£123 – £191
Covent Garden ~£316 – £355
Occupancy
Southwark 70% – 78%
Covent Garden ~82%
Southwark: Lower purchase cost and moderate returns. ROI (rental yield) ranges roughly between 4.5% – 8% per year.
Covent Garden: Higher capital requirement but significantly higher Airbnb income—yield could be in the 6% – 10%+ range.
To illustrate:
£650k purchase in Southwark → £40k annual revenue → ~6.2% gross yield.
£1.2m purchase in Covent Garden → £95k annual revenue → ~7.9% gross yield.
Final Thoughts
If capital is limited: Southwark offers a more accessible entry with decent yield.
If you can invest more: Covent Garden delivers much stronger returns but comes with higher upfront cost and possibly higher operational complexity and regulation.
If you’d like to have a detailed calculation of potential revenue vs cost and overall ROI for a specific property you’re considering purchasing - please reach out to us and we’ll be happy to help! Email us at: hello@stayinlondon.co.uk
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