The UK's top 10 areas for student by to let property investment
The latest data from property website Zoopla takes average asking prices for four-bed properties within major student centres, and compares these with average student rents achieved. This gives a gross yield.
Glasgow comes out top followed by Hull and Manchester. The lowest-yielders are London, Bristol and Lincoln.
In general yields are lower than landlords claim to be obtaining from other types of buy-to-let investment. But one of the attractions of student letting is the resilience of demand. This means unforeseen void periods - when properties aren't let - can be reliably minimised.
Zoopla's research contradicts reserach by other property firms including upmarket agent Knight Frank, which found in an earlier report that London was most profitable. This took into account capital growth, however.
In recent years much new, specialist student accommodation has been built with developers taking investors' cash upfront. Investors typically own a room or flat within a larger complex and draw an income after management and other costs have been deducted.
Much of this development is focused around London and offers comparatively luxurious accommodation, aiming to capitalise on wealthy students from overseas. Property sourcing firms have promoted these widely to income-seeking investors as easy, "armchair" investments - to the extent that warnings have been sounded. Such investments are not regulated.
Lawrence Hall of Zoopla said: “The largest number of students or most prestigious university clearly isn’t necessarily best for investment returns. Landlords need to do their research and take into account the student demand, property supply, average property values and average monthly rents.
"There is no apparent North/South divide when it comes to student buy-to-let investments and a number of towns in the North are showing higher gross yields than the South as a result of property values having remained lower over the past few years whilst rental demand has increased.”
Students are least likely of all tenants to miss a rental payment, with just 38pc of student landlords having experienced arrears in the last year. This compares to 59pc of landlords who let to blue collar workers and 71pc of landlords who let to benefit recipients.