Of all the universities in England, Sunderland has been identified as offering the best rental yields, with low house prices - at an average of £65,200 – and moderate average rents producing a yield of 10.6%.
The analysis, which was undertaken by property crowdfunding platform Property Partner, found that buy-to-let investors’ interest in the student market unsurprisingly peaks at this time of year as students across the country prepare to leave home for university for the first-time.
Property Partner compiled a list of 86 university towns and cities across the UK, including Northern Ireland, ranked by net rental yield in each local property market. The cities of the North East performed best, with Sunderland topping the table, alongside Middlesbrough, with Newcastle also featured in the top ten.
Birmingham also ranks highly, with the campuses of Aston and Birmingham City University offer a enticing prospect for property investors. The average sold house price here is just £116,732, meaning purchase costs are relatively low, while the average net yield is a healthy 4.5% per year. With the new High Speed 2 train terminal set to be built right next door, investors could potentially enjoy strong capital returns in the long term.
High property prices in southern university centres of London, Brighton, Reading and Oxford make these cities less attractive to investors as they tend to offer low yields.
Dan Gandesha, CEO of Property Partner, commented: “In this era of ultra low rates and high market volatility, stable investments which provide a reliable income, and medium to long-term capital growth prospects are the holy grail.
“Property is a total returns investment, and until recently, it’s been a capital returns play. But with Brexit, the rules of the game are changing. Now our investors are increasingly focussed on the reliable income they can earn, month after month.
“Property Partner enables anyone to invest in residential property all over the country, providing one-click access to grandparents, parents, and their college-age children, so they can take their view on the property market, wherever they study.”
The table below ranks the UK’s top 20 university towns, by net annual rental income in each college postcode:
University town
|
Median Rent pcm
|
Gross annual rent
|
Average house price
|
Average gross annual yield %
|
Average net annual yield %
|
Sunderland
|
£575
|
£6,900
|
£65,201
|
10.6
|
6.9
|
Teesside (Middlesbrough)
|
£425
|
£5,100
|
£56,272
|
9.1
|
5.9
|
Aston + Birmingham City
|
£676
|
£8,112
|
£116,732
|
6.9
|
4.5
|
Salford
|
£750
|
£9,000
|
£131,863
|
6.8
|
4.4
|
Edinburgh
|
£1,101
|
£13,212
|
£197,010
|
6.7
|
4.4
|
Manchester Metropolitan
|
£895
|
£10,740
|
£160,315
|
6.7
|
4.4
|
Manchester
|
£750
|
£9,000
|
£135,174
|
6.7
|
4.3
|
Newcastle + Northumbria
|
£823
|
£9,876
|
£150,609
|
6.6
|
4.3
|
Nottingham + Nottingham Trent
|
£794
|
£9,528
|
£151,535
|
6.3
|
4.1
|
Coventry
|
£901
|
£10,812
|
£179,412
|
6.0
|
3.9
|
Bangor
|
£750
|
£9,000
|
£156,173
|
5.8
|
3.7
|
Huddersfield
|
£540
|
£6,480
|
£116,802
|
5.5
|
3.6
|
Portsmouth
|
£925
|
£11,100
|
£201,434
|
5.5
|
3.6
|
Queen's, Belfast
|
£802
|
£9,624
|
£183,505
|
5.2
|
3.4
|
Edge Hill (Ormskirk)
|
£1,040
|
£12,480
|
£239,298
|
5.2
|
3.4
|
Durham
|
£650
|
£7,800
|
£151,438
|
5.2
|
3.3
|
Southampton
|
£901
|
£10,812
|
£212,852
|
5.1
|
3.3
|
Cumbria (Carlisle)
|
£477
|
£5,724
|
£113,025
|
5.1
|
3.3
|
Leeds
|
£776
|
£9,312
|
£184,628
|
5.0
|
3.3
|
Median rent figures courtesy of Home.co.uk\Average price paid figures courtesy of Zoopla
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