The value of towns and cities with just one university

The student population and landlords who have built portfolios to incorporate a large element of student lets and houses in multiple occupation (HMOs) in and around university towns and cities across the UK have not had it easy over the past few years. Thankfully, schools and universities are now largely back to ‘normal’ and just about to start, or have started, the new academic year.

To coincide with this, Paragon Bank has revealed the locations where landlords letting to students can achieve the strongest yields. Analysing mortgage applications for properties located in popular student postcodes, the lender found that landlords providing student accommodation in towns or cities with just one university typically achieve the highest yields.

Eight of the top 10 yielding university towns and cities only boasted one main university, extending to 14 when taking into account the top 20 yielding locations. Derby topped the yield list, with landlords generating an average yield of 8.67% in student postcodes.

The top 10 locations for student yields revealed that only two – Liverpool and Coventry – have more than one main university. Other locations on the list included Salford, Lincoln, Worcester, Plymouth and Durham.

This data helps demonstrate that the largest university towns with the highest concentration of students are not necessarily the foremost locations when it comes to generating the strongest yields. A factor which highlights the importance of landlords undertaking stringent due diligence when it comes to understanding what accommodation is already available and being in a position to fill any gaps in the market.

With this being a slightly more complex area of the buy-to-let market from a funding perspective, the advice process will inevitably play a key role in helping landlords to ensure that investment and yield calculations stack up. So, if you would like to know more about the potential attached to student lets then why not speak to one of our specialist advisers about the options available to you.

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