New data out from online property website Zoopla shows that Northern UK cities with large student populations provide buy-to-let investors with the best returns.
Zoopla found that Glasgow, followed by Manchester and Hull provide the highest yields for student landlord investments. London, Lincoln and Bristol were amongst the lowest areas for gross yields.
The survey uses asking price data for four-bedroom properties in major student towns and cities and compares these with the average rents paid in these areas to get a gross yield.
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.”
Zoopla said that on average yields are lower than landlords can get for letting out other types of property. However, demand from students is consistent which means periods of no income are minimised.
Earlier this year, research by the National Landlords Association (NLA) found that students were the least likely of all tenants to miss a rent payment. It found that just 38 per cent of all student landlords had experienced rental arrears in the last year, compared to 59 per cent who let properties to manual workers and 71 per cent who had tenants claiming benefits.
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