New Research Identifies the Best Yields in the UK for Student Accommodation
Published by Magnate Assets on
Oct 17, 2023
New research reveals increasing returns for buy-to-let investments catering to students, with the most robust yields observed in smaller university towns and cities in the UK.
An analysis of mortgage applications in popular student areas conducted by Paragon Bank indicates a steady rise in yields for landlords renting to students. Yields have climbed from an average of 5.63% in September 2020 to 6.66% in August 2023.
Smaller university towns and cities in the UK often offer the best returns, with Stoke-on-Trent leading the list of the top 10 locations for student rental yields. Stoke-on-Trent, with a population of 258,400 and home to Staffordshire University, sees landlords achieving rental yields of 9.42% on buy-to-let properties in student postcodes valued at £145,813, with an average annual rental income of £13,730.
Swansea comes second with average rental yields of 9.22%. Landlords in this Welsh city generate an annual rental income of £18,695 from student properties valued at £202,750 on average.
Glasgow is the only city with a population exceeding half a million to make the list, yielding 8.08% from properties in student postcodes valued at £211,729 on average, with an annual rental income of £17,109.
This trend highlights the consistent growth in yields for landlords serving the student market, driven by a surge in tenant demand, especially in smaller towns and cities. These locations can offer better returns because of more affordable property prices and reduced competition from purpose-built student accommodations, which are standard in major cities like London, Birmingham, and Manchester.