Analysis by Paragon Bank has revealed the top 10 locations for landlords who are focussed on student digs.
The buy-to-let mortgage lender has put the Staffordshire city in the top spot because data over the last two academic years showed landlords with accommodation in the Stoke student postcodes can achieve an average yield of 9.43%.
Students living here typically study in Stafford and Keele universities. The average annual rental income in the city’s student postcodes stood at £13,860, said Paragon, with the average student property priced at £146,944.
But, if Stoke isn’t suitable for your student buy-to-let investment, then there are other cities with attractive yields too.
Paragon found student postcodes in Liverpool achieved the second highest yields at 8.93%, followed by Edinburgh at 8.23% and York at 8.12%.
Coventry, which serves Warwick University and the University of Coventry, completes the top five, with student postcodes achieving a yield of 8.08%.
Overall, Russell Group university locations performed well. The Russell Group consists of 24 world-class, research-focused universities and, of this group, 13 are based in the top 15 yielding university towns and cities.
Property in student postcodes across the UK achieved a yield of 7.04% in July 2024, a figure that has risen from 6.12% in the same period two years ago.
Louisa Sedgwick, Paragon Bank 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.”
Top 10 university towns for landlords
(Source: Paragon Bank)
| Location | Annual rental income | Average property valuation | Yield |
| Stoke-on-Trent | £13,860 | £146,944 | 9.43% |
| Liverpool | £26,409 | £295,722 | 8.93% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| York | £39,360 | £484,958 | 8.12% |
| Coventry | £29,173 | £361,153 | 8.08% |
| Cardiff | £29,310 | £369,295 | 7.94% |
| Nottingham | £29,683 | £376,746 | 7.88% |
| Leeds | £36,996 | £470,279 | 7.87% |
| Exeter | £44,642 | £578,074 | 7.72% |
| Loughborough | £25,201 | £328,103 | 7.68% |
| Sheffield | £27,716 | £363,917 | 7.62% |
| Southampton | £28,804 | £379,383 | 7.59% |
| Durham | £34,001 | £453,263 | 7.50% |
| Bristol | £42,281 | £565,081 | 7.48% |
| Newcastle | £35,511 | £476,131 | 7.46% |
