Which university towns offer the best buy-to-let returns for landlords?
As university students prepare to return to their studies and A-level students find out if they got into their uni of choice, new research reveals landlords willing to rent to students are reaping the rewards – with above market average rental yields.
In a new league table published today, Simple Landlords Insurance rate universities by yield, with Durham hitting the top spot with the chance to earn up to an 11.5% p.a. return.
Warwick came second with an average yield of 10.3%, followed by Manchester at 8.5%.
Simple Landlords compiled the research by comparing the rental price advertised for student houses on popular roads with the estimated property values for 20 of the UK’s top universities.
Yet only one fifth of landlords are willing to rent to students. A Simple poll of 400 landlords revealed 79% haven’t or wouldn’t consider renting to students – with the majority preferring to play it safe by only renting to professional working tenants.
But the research shows that student properties can command significantly higher rent than their estimated market value.
Rental value estimates from property website Zoopla for similar properties on the same street as the student houses were lower than the price advertised specifically to student tenants for 17 out of 20 towns.
A four-bedroom house listed for rent in Chailey Road, Brighton, for instance, was marketed for students of Sussex and Brighton universities for £2,200 per month, giving an estimated yield of 8.2% based on sold prices of four-bedroom houses on the same street. But renting a four-bedroom house to tenants in an open market would command an average yield of just £1,325 or a 4.9% yield.
Tom Cooper, Director of Underwriting from Simple Landlords Insurance says:
“There are some great investment opportunities for the minority of landlords who are prepared to rent to the student market. And it’s not as risky a move as you might think.
“Often students don’t deserve their bad reputation. With university fees today’s students take their studies much more seriously, and many also work to see themselves through the semester. It’s not quite the hard-partying picture many have of student life.
“In fact, we’ve recently increased the discount on landlord insurance for properties let to students on the back of analysis carried out by our underwriters, which would suggest students just aren’t the reckless tenants many believe them to be.
“Don’t miss out on a great investment opportunity and sky-high yields because of tenant type. That’s what insurance is for. Get the right cover and inspect regularly to keep an eye on things before they can escalate.”
Kindly shared by Simple landlords