Recent figures released by property website, Zoopla, show some interesting
patterns in student property lets. The data took the average asking prices for
four-bedroom homes in popular student towns and cities and compared these
figures with the average student rents in the same area. The end result is the
gross yield, which tells us what landlords can expect to earn from student
properties.
Gross Rental Yields
You might be forgiven for thinking that student landlords down south would be
achieving the best gross yields on their properties, but in fact the opposite
is true. The top three areas are actually up north:
1. Glasgow – 4.95%
2. Hull – 4.80%
3. Manchester – 4.59%
London is only number 10 on the list, despite the high numbers of students
living in the capital, which contradicts previous research carried out by
different property firms.
Why Are Rental Yields Higher Up North?
The most obvious reason for the significant north-south divide is down to
property prices. The property market has remained fairly stagnant in many
northern cities whereas property prices are soaring in London and the
southeast. This, combined with the increase in demand for rental properties,
has had a big effect on average gross rental yield.
Why Let to Students?
Student investment properties are not as lucrative as some other types of
rentals, but they do have a number of advantages. Students are a steady source
of income and as long as you buy a property in a popular area, you won’t ever
be short of tenants. Students are also more likely to pay their rent up front
—sometimes up to a year in advance.
