Student property remains a highly profitable investment available to landlords, with great yields of almost 12% presently on offer.
With returning students heading back to university over the next few weeks, demand for student housing is currently high, but which locations can buy-to-let landlords investing in the student property sector expect to achieve the highest yields?
Recent research provided by online letting agent Urban.co.uk identifies which UK universities offer the best rental yield surrounding the campus.
According to the study undertaken, Birmingham has the highest return for the price of the property, in comparison to rental prices.
The UK’s second largest city is home to both Aston University and Birmingham City University in outcode B4, which share the same rental yield of 11.66%, with an average annual rental price of £15,672.
Teeside University in Middlesbrough (TS1) offers the third highest rental yield at an average of 10.73%.
LS2 in Leeds, where both the Leeds Art University and the University of Leeds are located, is home to a rental yield of 9.22%.
The University of Edinburgh in EH8 has the sixth highest rental yield at 8.61%, closely followed by Nottingham Trent University in NG1 with an 8.41% rental yield and Bangor University in LL57 with 8.1%.
Buy-to-let landlords can expect a rental yield of 7.65% near Edinburgh Napier University in EH11 and 7.55% when investing in property surrounding De Montfort University in Leicester LE1.
In order to calculate the rental yield surrounding each UK university, Urban used the local outcode to find the average property and rental prices of the area and divided the annual average rental cost by the average property price, giving the percentage of the rental yield of that outcode.
Adam Male, the Founder of Urban.co.uk, commented: “The buy-to-let market will always be a profitable business close to the nation’s university campuses despite the impositions that have been forced on the buy-to-let market of late, as thousands of students are in desperate need for accommodation every year.
“For those looking to get on the rental ladder, looking to invest near a university guarantees an annual income and one that is often footed by the Government via student loans. While it does have its negatives and can result in higher upkeep costs, investing near to one of these universities can make a great sense financially.
“Although the housing market is stronger in London and the South East in terms of actual prices, the Midlands and further north provide a much more attractive proposition in terms of rental yields and these areas are also home to some of the UK’s top universities. These are the sort of factors that buy-to-let landlords need to consider in the current landscape when looking to invest.”