Back to school for buy-to-let: Universities bring the UK’s highest rental yields

July 18, 2019

Research by lettings platform, Howsy, has found that almost all of the UK’s top 20 best postcodes for buy-to-let rental yields are located within close proximity to a university campus.

Using statistics from PropertyData, Howsy looked at the best buy-to-let postcodes based on 12 month’s rent divided by the average property price in the area, ranking each postcode from the highest yield available to buy-to-let landlords.

The research shows that 17 out of the top 20 buy-to-let postcodes in the UK are within easy reach of a university campus.

Bradford’s BD1 is the best university investment option in the UK. Covering Bradford city centre, it is just a short walk from the University of Bradford and with the average house price in the area costing £54,938 and an average monthly rent of £468, buy-to-let landlords can secure yields of 10.2%.

Sunderland’s SR1 is the next best university postcode for property investment with yields of 9.4%, followed by Liverpool’s L7 close by to both the University of Liverpool and the Royal Liverpool University Hospital with the postcode home tom yields of 9.3%.

The TS1 postcode close to Middlesbrough train station and Teeside University is home to yields of 9.2% and L6 also around the Royal Liverpool University Hospital is also home to yields above 9% (9.1%), with L1 close to the University of Liverpool close behind at 8.7%.

Other towns to feature with some of the highest yields for buy-to-let postcodes are Grimsby (DN31), Edinburgh (EH8), Pontypridd (CF37), Glasgow (PA3, G21, G52 & G14), Manchester (M14), Newcastle (NE6), Leeds (LS6) and Nottingham (NG1).

Founder and CEO of Howsy, Calum Brannan, commented:

“It’s no coincidence that the vast majority of postcodes with the highest rental yields are found within a stone’s throw of a university campus, and for a safe bet on your investment, these are the places to look when buying.

While students aren’t always the ideal tenants, they bring consistent demand via an annual flow of new arrivals, the void periods are generally much shorter, and the supply-demand imbalance puts the landlord in control when choosing a tenant.

As a result, these hot pockets of buy-to-let demand offer landlords an investment option that is almost certain to provide a healthy return despite slower market conditions and uncertain times in the buy-to-let market. Couple this with Howsy’s 24/7 customer service that seems to resonate well with student tenants and their nocturnal lifestyle and you’re onto a winner.”

The top 20 UK postcodes for the highest buy-to-let yields
Location
Postcode District
Average House Price
Average Rent (per month)
Average Rental Yield (%) *
University Campus
Sandwich, Kent
CT13
£388,310
£5,893
18.2%
N/A
Bradford
BD1
£54,938
£468
10.2%
University of Bradford
Greenock, Renfrewshire
PA15
£48,609
£394
9.7%
N/A
Sunderland
SR1
£63,320
£498
9.4%
University of Sunderland city campus
Liverpool
L7
£95,117
£737
9.3%
University of Liverpool & The Royal Liverpool University Hospital
Middlesbrough
TS1
£57,452
£442
9.2%
Teeside University
Liverpool
L6
£88,963
£672
9.1%
University of Liverpool & The Royal Liverpool University Hospital
Liverpool
L1
£99,908
£728
8.7%
University of Liverpool
Grimsby
DN31
£63,696
£442
8.3%
University of Grimsby
Edinburgh
EH8
£226,068
£1,556
8.3%
The University of Edinburgh
Pontypridd
CF37
£114,784
£776
8.1%
University of South Wales – Treforest Campus
Paisley
PA3
£64,074
£433
8.1%
University of the West of Scotland – Paisley campus
Glasgow
G21
£75,733
£511
8.1%
Glasgow Caledonian University – Glasgow School of Art
Manchester
M14
£176,901
£1,170
7.9%
The University of Manchester & Manchester Royal Infirmary
Falkirk
FK3
£71,233
£468
7.9%
N/A
Newcastle
NE6
£122,533
£797
7.8%
Newcastle University & Northumbria University
Leeds
LS6
£200,126
£1,300
7.8%
Leeds University & Leeds Arts University
Nottingham
NG1
£133,524
£849
7.6%
Nottingham Trent University
Glasgow
G52
£89,809
£568
7.6%
Queen Elizabeth University Hospital & Glasgow Caledonian University
Glasgow
G14
£92,683
£576
7.5%
Queen Elizabeth University Hospital & Glasgow Caledonian University
*Average rental yield based on monthly rent multiplied by 12 and then divided by the average house price
Source: https://propertydata.co.uk/

 

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