Landlord News

Where are the best University locations for buy-to-let investment?

Em Morley - August 21, 2017

Interesting new research conducted by online estate agent eMoov.co.uk has assessed the top 50 universities in the UK, in terms of providing the most affordable options for those looking to get a foot on the student buy-to-let ladder.

In addition, the agent looked at which University towns represent the best investment in the long-term, based on the rental yield of a property in that region. Finally, eMoov looked at which lender provides the most affordable options that came in both top 10 tables – offering both an affordable price tag and high rental yield.

Affordability

Within the top 50 universities assessed by the investigation, the average house price is £318,267, with the average stamp duty cost reaching £17,476.

The best university town for making a first-step on the student buy-to-let ladder is Durham, with an average house price of only £102,347 and stamp duty cost of £3,070.

When taking additional stamp duty costs into account, the rest of the top ten locations based on affordability is:

  • Dundee University – £122,317
  • Queen’s University, Belfast – £123,961
  • Glasgow University – £127,317
  • Nottingham University – £137,376
  • Swansea University – £144,888
  • Keele University – £150,198
  • Lancaster University – £153,630
  • Sheffield University – £157,045
  • Derby University – £157,253
Where are the best University locations for buy-to-let investment?

Where are the best University locations for buy-to-let investment?

Yields

In terms of rental yields, rather than the initial cost of getting onto the student buy-to-let ladder, the average return was found to be 5.51%. The average yearly rent has reached £15,822.

Nottingham University was found to be the number one buy-to-let option, with an average house price of £133,215 and average annual rent of £11,400. Nottingham offers a rental yield of 8.56%.

The rest of the top ten in terms of yields was found to be:

  • Leeds University – 7.80%
  • Queen’s Belfast – 7.50%
  • Coventry University – 7.43%
  • Glasgow University – 7.31%
  • Manchester University – 7.16%
  • Swansea University – 7.08%
  • Birmingham University – 6.82%
  • Aston University – 6.82%
  • Portsmouth University – 6.59%

For the best of both worlds, Nottingham University, Queen’s Belfast, Glasgow University and Swansea University offer the best investment options for both affordability and yields.

Lucrative

Russell Quirk, founder and CEO of eMoov.co.uk, observed: ‘“Despite the buy-to-let market receiving a bit of a kicking over the last year, it still remains a very lucrative business and one that is only marginally soured by the additional 3% in stamp duty tax.

The presence of a top university nearby is one way of ensuring a consistent stream of income to sweeten the recent changes in buy-to-let dis-incentivization. What’s more, the UK has an abundance of top universities spread far and wide and so it provides a whole host of more affordable options for getting on the buy-to-let ladder, other than the usual go to option of an over inflated London market.

With the likes of Durham, Nottingham and more providing much lower costs for that first foot on the ladder but equally as appealing rental yields, a buy-to-let in a university town can be a very good investment indeed.’[1]

 

 

[1] http://www.propertyreporter.co.uk/property/where-are-the-best-towns-and-cities-to-invest-in-student-accommodation.html