For landlords looking to maximise rental yields, investing in student property has long been a smart strategy. The demand for student accommodation continues to rise, driven by the growing number of students attending universities across the UK. Offering strong returns and a stable rental market, student properties can be a lucrative addition to any investment portfolio.
Our latest research, based on lending data from popular student postcodes, reveals the top ten university towns and cities in the UK offering the highest rental yields for student accommodation. These locations boast world-class universities, a vibrant student culture, and strong demand for rental properties, making them prime opportunities for landlords.
Why Invest in Student Accommodation?
Before diving into the best locations, let’s explore the key reasons why student letting is a smart choice for landlords:
- Consistent Demand: Each year, thousands of new students enter the rental market, ensuring a steady demand for student housing. Universities attract both domestic and international students, providing a diverse tenant base.
- Higher Rental Yields: Student properties often offer higher rental yields than traditional buy-to-let properties due to multiple tenants sharing accommodation, driving up rental income.
- Longer Tenancies: Student tenancies are typically for a full academic year, providing more stability and reducing the likelihood of frequent tenant turnover.
- Central Locations: Student accommodations are often located in close proximity to universities, making them desirable for both students and potential future buyers.
- Fixed Rent Payments: Students usually rely on loans or parental support, which can ensure more consistent rent payments.
With these advantages in mind, let’s explore the UK cities offering the highest yields for student letting:
1. Stoke-on-Trent (Yield: 9.43%)
Topping the list, Stoke-on-Trent offers landlords an impressive yield of 9.43%. With two major universities, Staffordshire University and Keele University, the city benefits from strong student demand and affordable property prices (average of £146,944). Stoke’s low cost of living and proximity to Manchester and Birmingham make it a popular choice for students seeking affordability and convenience.
2. Liverpool (Yield: 8.93%)
Liverpool, a lively city with a vibrant student scene, is home to the University of Liverpool and Liverpool John Moores University. The city offers landlords an attractive yield of 8.93%, supported by a rental income averaging £26,409. With its rich arts and culture scene, sports activities, and affordable living, Liverpool continues to attract a large student population, making it a highly profitable location for student lettings.
3. Edinburgh (Yield: 8.23%)
As Scotland’s capital and home to the prestigious University of Edinburgh, this city offers landlords a yield of 8.23%. Edinburgh’s international reputation and cultural richness make it an attractive destination for students from around the globe. The combination of historical charm, a vibrant city life, and the university’s strong academic standing provides landlords with a stable rental market and high returns.
4. York (Yield: 8.12%)
York is a city steeped in history and academic excellence, with the University of York being a key driver of student demand. With a rental yield of 8.12%, landlords benefit from a strong rental market in a picturesque setting. Students are drawn to York’s medieval architecture and vibrant student community, making it a reliable and profitable investment for landlords.
5. Coventry (Yield: 8.08%)
Home to both the University of Warwick and Coventry University, Coventry boasts a yield of 8.08%. The city is known for its affordable property prices and high demand for student housing. With its modern campuses, proximity to major cities like Birmingham, and a diverse student population, Coventry offers landlords an excellent opportunity to achieve high rental yields.
6. Cardiff (Yield: 7.94%)
Wales’ capital city, Cardiff, provides landlords with a solid yield of 7.94%. As home to Cardiff University, a prestigious Russell Group member, the city attracts students with its lively atmosphere, affordable living, and access to cultural and sports activities. Cardiff’s mix of affordability and vibrant student culture makes it an attractive option for property investors.
7. Nottingham (Yield: 7.88%)
Nottingham is home to two major universities, the University of Nottingham and Nottingham Trent University, creating a robust student population. With a yield of 7.88%, landlords benefit from high demand and a competitive rental market. Students are drawn to the city’s affordable living options, rich history, and thriving nightlife, ensuring a steady stream of tenants.
8. Leeds (Yield: 7.87%)
Leeds is known for its large student population, supported by the University of Leeds and Leeds Beckett University. Offering a yield of 7.87%, Leeds provides landlords with a strong rental market and continued student demand. The city’s dynamic culture, diverse student community, and affordable living make it a popular destination for students and a profitable one for landlords.
9. Exeter (Yield: 7.72%)
Exeter, home to the University of Exeter, offers landlords a yield of 7.72%. Although property prices in Exeter are higher than in many other cities, the rental income remains strong. Students are drawn to Exeter’s beautiful surroundings, small yet lively city centre, and top-quality education, ensuring a consistent rental market for landlords.
10. Loughborough (Yield: 7.68%)**
Known for its sporting excellence, Loughborough is home to Loughborough University, a hub for athletic and academic achievement. With a yield of 7.68%, the city offers landlords excellent returns on student accommodation. Loughborough’s vibrant campus life and world-class sports facilities attract students from across the globe, making it an ideal investment for those targeting student rentals.
Conclusion
Investing in student property offers landlords significant opportunities to achieve high rental yields, stable income, and long-term demand. Cities like Stoke-on-Trent, Liverpool, and Edinburgh lead the way with strong returns, affordable property prices, and vibrant student communities. For landlords looking to diversify their portfolios and maximise returns, student letting remains one of the most reliable and profitable strategies.
For more insights into investment opportunities, visit our blog or contact us for expert advice.
