Plymouth has been named as the top location for landlords investing in purpose-built student accommodation, data from online buy-to-let agency yieldit has revealed.
The city commands average net yields of 7.24%, according to an analysis of yieldit’s available student properties, which puts it ahead of all other areas in terms of profitability. On average, Plymouth's student landlords receive a 2.47% higher return than the lowest ranking city, Newcastle, which has a 4.77% average net yield.
Student landlords in Leeds receive the next highest returns (at an average of 6.57%), boosted by the University of Leeds' standing as one of the UK’s largest higher education institutions. The university is home to more than 34,000 students, making it the fifth biggest in the UK in terms of total student numbers.
Sheffield was next up, with an average return of 6.24%, closely followed by Liverpool at 6.23%. Both these locations are famously lively student cities, playing host to more than one university and thousands of students competing for rental accommodation.
The top five was completed by Nottingham, which commands an average net yield of 6.17%.
Three of the top five locations for the highest student yields also featured in the Which? University Student Survey 2018 ‘all-rounder universities’ category. The University of Leeds, the University of Nottingham and the University of Sheffield each scored highly across all metrics, suggesting that, as expected, the popularity of higher-education institutions among students is one of the leading barometers of where good yields might be gained.
Middlesbrough, meanwhile, was right in the middle of yieldit’s table of results, with average net yields of 6.14% putting it only slightly behind Liverpool and Sheffield. Part of the reason for this is the £270 million invested into Teesside University’s award-winning campus, which is helping the establishment to attract students from the UK and further afield. In fact, the university has witnessed students from more than 100 countries graduating from its courses.
“Investment in purpose built student accommodation is an excellent way for buy-to-let investors to diversify and continues to offer excellent returns thanks to the world-class reputation of higher education institutions in the UK,” Ryan Hughes, head of sales at yieldit, said.
“Predictably the best performing areas are those which are the most popular among students looking for a comprehensive university experience, with everything from specialist courses to a fantastic nightlife,” he added. “With that in mind we expect that other locations on the list will continue to climb in the profitability rankings as they invest further in their universities and campuses grow in size.”