Buy-to-let property returns are highest in student cities including Liverpool, Edinburgh and Manchester
Liverpool has been named the best university city to invest in for high rental returns, according to new research by TotallyMoney.
Their latest Buy-to-Let Yield Map 2018 highlights regional university cities including Liverpool, Manchester, Middlesbrough, Newcastle Upon Tyne and Edinburgh as being the best performers for returns.
It proposes that the consistent stream of students attending university in these cities means landlords will never face a shortage of tenants that require housing, resulting in fewer, if any, void periods.
This is despite tighter lending criteria, an incoming ban on tenant fees, and changes to the amount of tax relief on mortgages.
Large student populations, a postcode’s proximity to university campuses and more affordable house prices are all contributing factors, according to the research.
The L7 postcode in Liverpool is the top ranked location, with rental returns of around 11.79%. This is due to being near the city centre and two of the city’s three universities, which have a total student population of 70,000.
Middlesborough’s TS1 postcode is in the centre of town and includes Teeside University and its 22,000-strong student population. It is also one of the most affordable locations, with asking prices of £65,638 on average.
Several postcodes in London ranked as the worst for returns, due to the city’s notably higher property prices.
“Year after year, there’s a constant flux of students looking for somewhere to bed down for the night,” said Joe Gardiner, Head of Brand & Content at TotallyMoney, “so it’s no surprise that university cities offer landlords the highest buy-to-let yields.
“Demand is high, and landlords may use this as an opportunity to drum up competition between tenants and push rental yields higher.”
Despite higher university fees, research by Knight Frank revealed that students are increasingly targeting places at Russell Group universities, the UK’s most prestigious institutions.