Stoke, Liverpool and Edinburgh have been named as the most popular areas for yields from student lets.
Research by Paragon Bank found landlords in Stoke, who provide accommodation to students studying at Stafford and Keele universities, achieved an average yield of 9.43% in July 2024, based on offer data over the past two academic years.
Average annual rental income in the city’s student postcodes stood at £13,860, with the average student property priced at £146,944.
Student postcodes in Liverpool achieved the second highest yields at 8.93%, followed by Edinburgh at 8.23% and York at 8.12%. Coventry, which serves Warwick University and the University of Coventry, completes the top five, with student postcodes achieving a yield of 8.08%.
Overall, Russell Group university locations performed well. The Russell Group consists of 24 world-class, research-focused universities and, of this group, 13 are based in the top 15 yielding university towns and cities.
Property in student postcodes across the UK achieved a yield of 7.04% in July 2024, according to the research, a figure that has risen from 6.12% in the same period two years ago.
Louisa Sedgwick, managing director of mortgages for Paragon Bank, said: “Student property remains a popular choice for portfolio landlords because they can typically achieve higher yields than standard buy-to-let property. They also benefit from parental guarantees, so arrears are typically lower.
“The stronger performing locations based on our lending data shows that there’s a gravitation towards quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Neil Smith, Paragon Bank head of surveyors, added: “Portfolio landlords usually have in-depth knowledge of local student markets to the point where they know the prime local areas and even the favoured roads that provide a strong sustainable student rental demand. With demand for university places forecast to rise over the next few years, there will be greater need for student accommodation.
“Some of this will be met by Purpose Built Student Accommodation, but the traditional student property provided by private landlords will remain very much part of the mix.”
| Location | Annual rental income | Average property valuation | Yield |
| Stoke-on-Trent | £13,860 | £146,944 | 9.43% |
| Liverpool | £26,409 | £295,722 | 8.93% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| York | £39,360 | £484,958 | 8.12% |
| Coventry | £29,173 | £361,153 | 8.08% |
| Cardiff | £29,310 | £369,295 | 7.94% |
| Nottingham | £29,683 | £376,746 | 7.88% |
| Leeds | £36,996 | £470,279 | 7.87% |
| Exeter | £44,642 | £578,074 | 7.72% |
| Loughborough | £25,201 | £328,103 | 7.68% |
| Sheffield | £27,716 | £363,917 | 7.62% |
| Southampton | £28,804 | £379,383 | 7.59% |
| Durham | £34,001 | £453,263 | 7.50% |
| Bristol | £42,281 | £565,081 | 7.48% |
| Newcastle | £35,511 | £476,131 | 7.46% |
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