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Which university towns offer the best buy-to-let returns?

Durham has been identified as the number one destination in a new survey looking at which university towns offer the best yields for landlords.

Simple Landlords Insurance rated universities by yield and found that Durham offers landlords the opportunity to earn up to 11.5% return annually.

Warwick came second with an average yield of 10.3%, followed by Manchester at 8.5%.

Simple Landlords compiled the research by comparing the rental price advertised for student houses on popular roads with the estimated property values for 20 of the UK’s top universities.

Tom Cooper, director of underwriting from Simple Landlords Insurance, said: “There are some great investment opportunities for the minority of landlords who are prepared to rent to the student market. And it’s not as risky a move as you might think.”

But despite the fact that student properties can command significantly higher rent than their estimated market value, the study also found that only one fifth of landlords are prepared to rent to students.

A Simple poll of 400 landlords revealed 79% have not or would not consider renting to students, with the majority preferring to rent to professional working tenants.

Cooper continued: “Often students don’t deserve their bad reputation. With university fees today’s students take their studies much more seriously, and many also work to see themselves through the semester. It’s not quite the hard-partying picture many have of student life.”

Simple Landlords recently increased the discount on landlord insurance for properties let to students on the back of analysis carried out by its underwriters.

Cooper added: “This [greater discount on landlord insurance] would suggest students just aren’t the reckless tenants many believe them to be.

“Don’t miss out on a great investment opportunity and sky high yields because of tenant type. That’s what insurance is for.

“Get the right cover, and inspect regularly to keep an eye on things before they can escalate.”

Poll: As a landlord, are you prepared to rent to students?

PLACE YOUR VOTE BELOW

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    Students make excellent tenants if parents sign joint and several liability guarantees as parents are usually solvent and sensible. Flats in Edinburgh and St Andrews can also be let as holiday lets in vacation times, although the SNP's recent removal of the landlord's right to determine lease periods threatens this opportunity which will lead to higher rents and reduced availability for these students. However, 4 bed student flats can now command £2100 per month, yielding 8 to 10% gross.

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