Most professional landlords own properties in student areas due to the combination of constant demand, minimal void periods and great potential for yields. This said, some university towns now offer far more lucrative returns than others.
Durham reigns supreme as the top student buy-to-let hotspot, boasting a staggering 9.12 per cent yield a whole 2.5 per cent more than the UK average of 6.59 followed by Nottingham at 9.05 per cent. The top five is completed by the Northern towns of Stoke, Sheffield and Blackpool.
The worst town for rental returns is Crewe with yields of only 3.40 per cent, straying from the trend sparked by its Northern neighbours. Further South, the other student areas of Pontypridd, Guildford, Cheltenham and Devon didnt fare much better however due to their location it is thought that this lack of significant rental profit is due to high house price growth compare with static rents.
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The cream of the crop of British universities, Oxford and Cambridge strayed from this trend and hold differing prospects for potential landlords. Cambridge offers an above average yield of 6.82 per cent whilst Oxford offers just 5.08 per cent, despite the fact that both areas offer similar rental income at £84 and £79 per week respectively.
Lee Grandin, managing director of Landlord Mortgages, explained: Students can be a profitable bunch to rent to, providing you choose the correct location. Whether you are entering the market as an investor in student property, or as a parent buying accommodation for a child at university, the returns can be substantial.
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With the average student property offering 6.59 per cent, the yields for renting to students are far higher than those to be gained by standard buy-to-let property average rental yields in England are currently 5.42 per cent so investors who choose to rent to students can make far higher returns providing they find the right property.
Landlords should however think their purchase through carefully. Local knowledge is of utmost importance and landlords must also consider all of the differences that renting to students has to the average rental property. For example that the properties must be provided furnished, including certain items of furniture suitable for students, and the possibility of the property being returned in a less than ideal condition.
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