Research reveals which university cities are best for expat student landlords

by Ray Clancy on May 17, 2017

Expat parents who buy a property for their student offspring to use while studying in the UK could earn a decent amount by renting out rooms to other students, especially in cities with the top universities.

The owner of property rented out to students in the top 10 university locations could see their investment bringing rental yields of up to 5.22%, according to new research.

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It points out that some of the UK’s most prestigious and highly ranking universities can receive up to five applications per place, forcing them to turn away nearly 80% of applicants. Due to high demand for spaces at the top universities, student landlords in these top performing areas can rely on reputation alone to fill their rooms, and ensure student property is a reliable investment

Out of the top 10 ranking universities Durham, in sixth place in the current university league table, is amongst the cheapest places to buy property, averaging £151,465 for a four bedroom home and landlords can expect rental yields of 5.22%, says the study from StudentTenant.

Warwick is next in terms of yields and has a student population of 25,000 but the average price of four bedroom property is much higher at £338,220, but landlords can expect rental yields of 5.11%.

Loughborough, which is tenth in the university league table and ranks third for the best yield, with landlords expecting rental yields of 5% in a location with a student population of 16,500.

The University of Cambridge ranks first in the tables but it only seventh for rental yields. It has a student population of around 20,000 and landlords could expect rental yields of 3.64%.

Oxford University, ranked as the second best university in the UK, is sixth for property rental yields with a potential of 4.12% and London is the worst performing location for buy to let landlords because of the high price of property.

‘Anyone looking to invest in a student property is advised to assess the potential rental yields in the area to see if it’s a sound investment. However, rental yields aren’t everything and there are many things to consider before purchasing a student rental property,’ said Danielle Cullen, managing director at StudentTenant.

Key issues to consider include how near the property is to the university, its condition, parking facilities and location regarding amenities and carrying out research as the most obvious investment may not be the best.

‘Looking just at rental yields for the top 10 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,’ Cullen explained.

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

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