Where are the top university locations for buy-to-let investment?
By |Published On: 22nd May 2017|

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Where are the top university locations for buy-to-let investment?

By |Published On: 22nd May 2017|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

The top university cities for buy-to-let investment have been revealed in a new report from StudentTenant.com.

It indicates that landlords can earn substantial returns when purchasing near a university, with shrewd investors able to enjoy the best yields.

Northern Delights

A mixture of low property prices and spiralling demand for rental accommodation in prominent student cities in the North of England is seeing some landlords enjoying double-digit returns.

This said, data from the report suggests that the typical rental yield in the student buy-to-let market across Britain is substantially lower.

Durham came top of the class, offering the best buy-to-let of the top-ten ranked universities in the list. This was followed by Warwick and Loughborough.

Landlords purchasing near Durham University can look forward to average yields of 5.22%. Warwick and Loughborough offer typical returns of 5.11% and 5% respectively.

Capital Pains

On the other hand, London was found to be the worst performing region for buy-to-let student landlords. All three of the top ten ranked universities here saw the lowest rental yields.

Here, landlords can expect rental yields of 3.46%, with property prices here amongst the highest in the UK.

The table below shows the top-ten ranked university locations for buy-to-let investment in the UK:

Rental Yield Rank Location University League Table Rank Student Population Avg. Property Price Avg. Rental Yield
1 Durham Durham University 6 17,927 £151,465 5.22%
2 Warwick University of Warwick 8 25,615 £338,220 5.11%
3 Loughborough Loughborough University 10 16,500 £237,005 4.93%
4 Fife University of St Andrews 3 8,790 £158,113 4.60%
5 Lancaster Lancaster University 9 13,336 £148,268 4.46%
6 Oxford University of Oxford 2 22,602 £497,603 4.12%
7 Cambridge University of Cambridge 1 19,672 £465,588 3.64%
8 London Imperial College London 5 14,700+ £717,217 4.53%
9 London London School of Economics 4 8,895 £1,125,671 3.46%
10 London University College London 7 38,000+ £1,125,671 3.46%
Where are the top university locations for buy-to-let investment?

Where are the top university locations for buy-to-let investment?

Rental Yields

Danielle Cullen, managing director at StudentTenant.com, observed: ‘For anyone looking to invest in a student property, it’s always advised to assess the potential rental yields in the area to see if it’s a sound investment. However, I must stress that rental yields aren’t everything and there are many things to consider before purchasing a student rental property.’[1]

‘Is the property located near the university? Does the property have parking spaces? What is the current condition of the property? It’s important to collect as much information before taking the plunge, to ensure you get the best possible deal,’ she continued.[1]

Moving on, Cullen said: ‘Looking just at rental yields for the top ten ranking universities, it might seem attractive to invest in a student property in an area like Warwick or Loughborough where yields are around 5%. However, when you account for the higher property prices, it might not be the best option available for investors.’[1]

‘Durham could well be an up and coming investment location for the student sector. It’s typically not what I would consider a ‘hotspot’ for private landlords looking to increase their portfolio, but could well be one to watch.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/top-university-towns-for-buy-to-let-revealed

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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