The findings of a study by lender Paragon Bank has highlighted the top student property investment locations in the UK and found that student property landlords with rentals in smaller university towns or cities can generate the best returns on average.
With house prices and rents forecasted to increase over the coming years, the study may prove useful to student property landlords looking to identify which locations in the UK will generate the best rental yields.
Swansea grabs the top spot for student property, with an average price of £231,534, giving an average yield of 9.56 per cent. Hull takes second place with an average return of 8.68 per cent per annum.
Paragon Bank uncovered more about student property locations by comparing the student populations, the number of universities in a town or city, and the best yields.
A key discovery from the study was that the best returns are not necessarily found in cities with a high population of students,
Out of the top 10 locations, seven only had one main higher education institution where the student population was typically less than 25,000. The only locations in the top ten with more than one university were Liverpool, Coventry, and Leeds.
Investor enquiries for student accommodation in Liverpool, Salford, and Bolton increased by 21 per cent from Uk and international investors, according to but-to-let investment specialist the Mistoria Group.
Mish Liyanage, managing director of The Mistoria Group further explains: “Without doubt, investors achieve considerably higher yields with property let to students, compared to those let to non-students in the same town or city.
“For example, student landlords in Liverpool made an average gross rental yield of 13 per cent in the third quarter of 2021, compared to 9 per cent for those who did not let to students.”
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