Every year, in September, students across the country pack up their belongings, say goodbye to mum and dad and move to new towns and cities ready to return or begin their studies for another year. Whilst many are looking forward to meeting new people, living in a new town and experiencing ‘University life’, it’s their landlords who are the biggest winners. Time and time again, university towns and cities have proven to generate the highest yields.
With 130 universities and over 2.28 million students studying in the UK (Universities UK, 2016), demand is strong and most students want to rent for a minimum of 12 months. Therefore, renting to students can be big business for Buy-To-Let landlords, with students paying up to £2,000 a month in rent and some cities generating an annual yield of up to 12 per cent.
So, where are the UK’s student Buy-To-Let hotspots?
In a recent study carried out by Simple Landlords Insurance, towns such as St Andrews, Lancaster and Loughborough offered the highest returns. The study which balances the cost of buying a property and the going rent paid by students, revealed on average, five students paying £150 a week each in St Andrews could bring in £36,000 a year in rent, generating a very healthy 12 per cent annual return.
The study also revealed that Exeter, Durham, Sussex and Nottingham which are home to some of the UK’s Russell Group universities performed strongly with yields in excess of 9.5 per cent per annum.
Remarkably, Oxford, despite being home to the top university in the UK, offered the lowest rental yields. On average, Oxford generated a yield of a mere 3.33 per cent.
So, depending on your budget and the return you want to achieve, there are a host of cities available to meet your requirements. However, it is worth noting that there is more to be a successful landlord than buying a property in a town or city with the top rental yields. Dan Channer, of Finders Keepers, states that “if Landlords want to charge top rents then the tenants will expect quality furnishings and the property will need to comply with housing and health & safety regulations”.
As always, Edifice Invest believes the future for investors remains in property and if done correctly, Buy-To-Let can be extremely profitable. So if you’re an investor looking to generate meaningful returns then we have a range of off plan Buy-To-Let properties in various locations which are all completed to high specifications and health & safety compliant. To speak to one of our advisors, fill out our contact form below and we will be in touch.