UK Student Rental Yields Reach 9.42% in Top Locations as Paragon Data Shows Structural Strength

New data from Paragon Bank confirms the structural strength of the UK student rental sector. Analysis of mortgage applications in known student postcodes shows average yields of 7.32%, materially ahead of the 6.86% recorded in non-student areas.

Stoke-on-Trent leads the table with a yield of 9.42%, based on average annual rental income of £14,222 against an average property valuation of £150,982. The city serves the University of Staffordshire and nearby Keele University. Plymouth ranks second at 9.27%, followed by Liverpool at 8.86%, Portsmouth at 8.31% and Cardiff at 8.27%. Edinburgh, Coventry, York and Leeds all deliver yields above 8%.

Cities with Russell Group universities feature strongly in the top 15. Liverpool, Cardiff, Edinburgh, York, Leeds, Nottingham, Sheffield, Durham, Exeter and Southampton all appear in the upper rankings. The results demonstrate that competitive returns are available both in established Russell Group locations and in regional centres with accessible property values and sustained student demand.

Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, noted that the figures illustrate the breadth of the university rental market. She emphasised that student property remains a specialist sector requiring professional management, local market knowledge and an understanding of the specific accommodation standards students expect.

Supply & Demand Dynamics and Rental Market Strength

The data aligns with broader supply constraints in the UK housing market. Limited new student accommodation supply, combined with steady or growing university populations, continues to support rental demand. Professional investors operating in the private rented sector (PRS) and purpose-built student accommodation (PBSA) segments are well positioned to benefit from these conditions.

The gap between student and non-student yields underscores the resilience of this asset class. Locations with strong employment hubs, transport links and university expansion plans offer additional visibility on long-term demand.

Investor Conclusion

For well-capitalised landlords and institutional investors, the Paragon findings reinforce the case for targeted exposure to student accommodation. Yields above 8% in multiple cities, combined with average student-postcode returns of 7.32%, provide clear income visibility. Professional operators who maintain high-quality stock and efficient management practices are best placed to capture these returns over a 5–10 year horizon.