Top university towns for rental yields unveiled

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St Andrews has been identified as the university town delivering the best rental yields for buy-to-let landlords.

The survey by Simple Landlords revealed that St Andrews was delivering annual returns of up to 12% each year.

Hot on the heels come Lancaster in second, followed by Loughborough and Birmingham, with all of these locations noted as having the potential to achieve 10% annual yields from student rentals.

The University of East Anglia in Norwich, and Cambridge, Bristol and Surrey universities featured among the areas delivering the poorest yields for landlords.

Alex Huntley, head of operations at Simple, said:

We took the top universities in the country – according to the Complete University Guide and examined which offered the smartest investment opportunity.

Unlike other studies, ours centred in on the house prices in the streets where students at each of the universities actually choose to live. It compared the cost of buying one of these properties with the rent that is actually paid by students studying at the establishments in question.

Andrew Turner, chief executive at Commercial Trust, commented:

The buy-to-let market offers a variety of opportunities. The leading annual yields revealed in this report go to show how robust an investment buy-to-let can be.

The student rental market is one that has had its share of mixed news but this underlines how with careful research, the shrewd buy-to-let landlord can target the student market with great return opportunities.

It is logical that the cheaper housing areas in the Midlands offer more generous yields than the traditionally more expensive south, but with the right strategy buy-to-let is a sound investment choice for any landlord.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.