With an average gross yield of 4.95% on typical four-bedroom student property, Glasgow tops the investment league table when it comes to student buy-to-lets.
While most students dream of getting a place at a prestigious Oxbridge college, landlords are likely to be looking at the returns that can be achieved from those university towns topping the league table published by Zoopla. Rounding out the top five behind Glasgow (4.95%) are Hull (4.80%), Manchester (4.59%), Cambridge (4.54%) and Bristol (4.29%).
The research revealed that the average gross yield on a typical four-bed student property across the UK is 3.79%. In terms of university towns that student landlords might wish to avoid, those with the worst returns currently were identified as Carlisle (2.58%), Middlesbrough (2.61%) and Bournemouth (3.09%).
Despite having the largest student population in the UK, London came in as only the tenth most attractive place in the UK to invest in student accommodation. Despite fierce demand for rental accommodation, house prices in the capital are increasing more rapidly than rents and reducing the returns on offer for landlords. The average gross yield on a typical student property in London is 4.20%.
In terms of best value for students, the cheapest digs are in Middlesbrough where the average monthly rent for a four-bed property is just £562. At the other end of the scale, London is by far the most expensive with an average four-bed property costing £3,485 per month. Oxford (£1,834) and Cambridge (£1,628) are also among the most expensive.
Lawrence Hall of Zoopla.co.uk commented:
“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.”
