Landlords looking for the best rental yields for student accommodation should look at Stoke, Liverpool and Edinburgh, research has shown.
According to an analysis from Paragon Bank, Stoke topped the student rental yield chart with an average rental yield of 9.43%. This is based on an annual rental income of £13,680 and an average property valuation of £146,944.
Liverpool had the second-highest student rental yield at 8.93%, which assumes an annual rental income of £26,409 and average property valuation of £295,722.
Edinburgh took the third slot with a student rental yield of 8.23%, according to an annual rental income of £32,789 and average property valuation of £398,320.
The top five was rounded out by York, Coventry and Cardiff, with student rental yields of 8.12%, 8.08% and 7.94%.
The report stated that property in student postcodes across the UK had an average rental yield of 7.04%, which is a rise from 6.12% two years ago.
Paragon said that Russell Group universities, which comprise 24 universities, ranked highly on rental yield, with 13 making up the top 15 university towns and cities.
Louisa Sedgwick (pictured), Paragon Bank’s managing director of mortgages, said: “Student property remains a popular choice for portfolio landlords because they can typically achieve higher yields than standard buy-to-let property. They also benefit from parental guarantees, so arrears are typically lower.”
She added: “The stronger-performing locations based on our lending data shows that there’s a gravitation towards quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Neil Smith, Paragon Bank’s head of surveyors, added: “Portfolio landlords usually have in-depth knowledge of local student markets to the point where they know the prime local areas and even the favoured roads that provide a strong sustainable student rental demand. With demand for university places forecast to rise over the next few years, there will be greater need for student accommodation.
“Some of this will be met by PBSA, but the traditional student property provided by private landlords will remain very much part of the mix.”
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
