Many buy-to-let landlords like the idea of investing in student housing, as it is considered to be a serious and lucrative asset class, but where can the best yields be achieved?
A new study reveals that landlords can earn returns of up to 6.6% when buying property in university towns, but only if they are shrewd about where they buy.
A combination of high demand for student accommodation and relatively affordable property prices mean landlords in Edinburgh, with a gross annual yield on a four-bedroomed property currently standing at 6.59% (£2,216 a month), are achieving the highest yield in the UK.
Scotland is home to the most student rental hotspots with half of the top 10 performers analysed located there, according to research from Zoopla.
At the other end of the scale, university towns towards the south of the country are the worst-performing, with Kingston-Upon-Thames ranked as the bottom location with a rental yield of just 2.81%.
Lawrence Hall, spokesperson for Zoopla, said: “This research presents an interesting analysis for investors looking to capitalise on the student rental market.
“Parents keen to help their children though the high costs of university may consider the value of buying a property in a student town.
“It also comes as little surprise that with the slowing growth in the property market in the south, buy-to-let investors in the north can get the highest proportional rental returns.”
Best buy-to-let student towns ranked by gross yield
|
Rank
|
University Town
|
Avg. Monthly Rent (4 bed property)
|
Avg. Asking Price (4 bed property)
|
Gross Yield
|
Months to pay off £27,750*
|
|
1
|
Edinburgh (University of Edinburgh)
|
£2,216
|
£403,431
|
6.59%
|
17
|
|
2
|
Glasgow (University of Glasgow)
|
£1,425
|
£263,482
|
6.49%
|
26
|
|
3
|
Stirling (University of Stirling)
|
£1,382
|
£288,124
|
5.76%
|
27
|
|
4
|
Salford (University of Salford)
|
£1,394
|
£295,294
|
5.66%
|
27
|
|
5
|
Belfast (Queen's University)
|
£999
|
£212,634
|
5.64%
|
37
|
|
6
|
Dundee (University of Dundee)
|
£1,119
|
£244,066
|
5.50%
|
33
|
|
7
|
Hamilton (University of the West of Scotland)
|
£1,135
|
£253,256
|
5.38%
|
33
|
|
8
|
Leeds (University of Leeds)
|
£1,301
|
£297,419
|
5.25%
|
28
|
|
9
|
Manchester (University of Manchester)
|
£1,286
|
£298,381
|
5.17%
|
29
|
|
10
|
Aberdeen (University of Aberdeen)
|
£1,406
|
£333,205
|
5.06%
|
26
|
Source: Zoopla September 2018
Worst buy-to-let student towns ranked by gross yield
|
Rank
|
University Town
|
Avg. Monthly Rent (4 bed property)
|
Avg. Asking Price (4 bed property)
|
Gross Yield
|
Months to pay off £27,750*
|
|
1
|
Kingston upon Thames (Kingston University)
|
£2,438
|
£1,041,704
|
2.81%
|
15
|
|
2
|
Hatfield (University of Hertfordshire)
|
£1,674
|
£697,395
|
2.88%
|
22
|
|
3
|
High Wycombe (University of Buckingham)
|
£1,487
|
£591,336
|
3.02%
|
25
|
|
4
|
Stoke-on-Trent (Staffordshire University)
|
£718
|
£275,101
|
3.13%
|
52
|
|
5
|
Lancaster (University of Lancaster)
|
£785
|
£300,069
|
3.14%
|
47
|
|
6
|
Winchester (University of Winchester)
|
£1,875
|
£694,238
|
3.24%
|
20
|
|
7
|
Carmarthen (University of Wales Trinity Saint David)
|
£786
|
£287,695
|
3.28%
|
47
|
|
8
|
Twickenham (St Mary's University)
|
£2,765
|
£1,004,990
|
3.30%
|
13
|
|
9
|
Carlisle (University of Cumbria)
|
£703
|
£254,941
|
3.31%
|
53
|
|
10
|
Egham (Royal Holloway, University of London)
|
£1,839
|
£654,836
|
3.37%
|
20
|
Source: Zoopla September 2018
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