Location should always be a key factor when considering your next property investment. Below, we look at the top locations for rental yields on student lets and why these property types are so popular.
Why invest in student lets?
Student lets are an increasingly popular property investment type amongst buy to let landlords. Average yields for student lets are higher than that of standard buy to lets, with some regions across the UK offering almost double for student properties. Furthermore, with growing numbers of students applying to university every year, landlords can rely on significant demand for their property, making this a worthwhile long-term investment.
Not only does high demand help to navigate any market challenges, as students will always need somewhere to live, but void periods on student properties are much less likely. With HMOs as the most common property type for students, the rents from the tenants in situ should cover your mortgage costs should one tenant leave or stop paying.
As with all types of property investments, choosing where to invest is a crucial factor to consider. New research from lending platform easyMoney reveals which locations offer the best yields on student properties across the UK.
Where should I invest in student lets?
The analysis from easyMoney looks at the rental yields on properties located around the top 100 rated universities, taking into account average property prices and rents. The results, perhaps unsurprisingly, suggest that for a healthy return on your investment, landlords should look at properties up North.
The report also contextualised how student lets perform compared to the wider property market. Yields in postcodes close to universities currently stand at 5.4%, whereas countrywide standard buy to lets achieved just slightly lower at 5.2%. However, as the results show, many university postcodes achieve significantly higher rental yields.
Properties near the University of Sunderland came out on top, generating an average yield of 10.1%. Property prices in this area are much lower than across the UK, at just £79,830, but with an average monthly rent of £672.
The area surrounding the University of Aberdeen followed closely behind, with average yields of 9.3%. Liverpool John Moores University and the University of Leeds ranked third and fourth, generating yields of 8.9% and 8.8%, respectively.
Jason Ferrando, CEO of easyMoney, commented:
“Landlords can get nervous when renting to students, but they provide you with a solid stream of income year-on-year that should more than pay for the potentially higher maintenance costs. The strongest yields are around universities in either the North of England or Scotland, where low house prices make it easy to turn a solid profit. This is particularly the case in Sunderland, where modest house prices should make it an attractive place for a first-time investor looking to start their portfolio.”
What’s next?
Read our full guide to becoming a student landlord here for more information on financing these properties and what to consider before you invest.
To explore what types of rates you could access for your next student let or any property finance plans you have, use our FREE buy to let calculator here or get in touch with our expert mortgage makers on 0345 345 6788.
Find your next buy to let mortgage
Are you looking to secure a mortgage for a student let? Head over to our investing in student lets page, or get in touch with one of our BTL mortgage brokers on 0345 345 6788 or submit an enquiry here.
