University towns and cities can make ideal places for buy-to-let (BTL) properties.
According to figures from the House of Commons, there were 2.46 million students attending higher education institutions during the 2019/20 academic year.
That’s over 2 million people needing somewhere to live from September to July, potentially for three years or more.
As students get ready to return to university next month, here are the five best university towns and cities to consider for BTL university properties.
The University of Dundee is one of Scotland’s leading research universities.
According to research from Halifax, Dundee is the 10th most affordable city to buy a home in across the whole of the UK, with an average house price of £181,150.
That’s just a fraction above the average house price in Scotland of £173,961, and well below the UK average of £266,000.
As well as low house prices, online letting agent and property manager Howsy found Dundee to have the highest average rental yield of all university towns in the UK in 2020.
Average rent prices for property in Dundee came in at £876, producing an average rental yield of 7.2%.
Therefore, low house prices combined with high rental yields make Dundee an attractive prospect for BTL landlords.
Aberdeen is home to 16,000 students attending two universities: the University of Aberdeen, and Aberdeen’s Robert Gordon University.
Howsy found average rental yields to be 6.8% in 2020 and, according to Zoopla, average prices in the city as of August 2021 are £210,023.
This makes Aberdeen a slightly more expensive choice than the rest of Scotland. But, compared to the UK as a whole, it’s still an affordable option with a history of strong student rental returns.
The University of Glasgow and Strathclyde University put Glasgow high up on the list for BTL university properties.
The universities have 29,000 and 23,000 students attending them, respectively, meaning there’s a healthy university population to rent to.
On top of that, houses closest to Strathclyde university produced the third-highest average rental yield in 2020, offering 6.62% according to Howsy.
As a major Scottish city, Glasgow unsurprisingly has fairly high house prices compared to the rest of Scotland; Zoopla estimates the current average value to be £204,007.
With the University of Leicester and De Montfort University both in the city centre, and Loughborough University just 10 minutes away, an estimated 66,000 students call Leicester home.
Leicester has a population of just over 350,000, meaning nearly 20% of the inhabitants are students in need of somewhere to live during their studying years.
Howsy found Leicester to have the highest average rental yield of all English universities, with a 6.6% return in the LE1 postcode in 2020.
Birmingham is an ideal city for a BTL property because there are five major universities there: Aston University, Birmingham City University, Birmingham University, Newman University, and University Birmingham College.
The city is also home to the University of Law, Aston Business School, with all seven institutions offering a huge pool of 80,000 students for you to rent to.
Aston University properties ranked fifth on Howsy’s 2020 list of rental yields, producing a return of 6.5%. Meanwhile, properties nearest the University of Birmingham saw a 4.1% return.
These figures show a potentially lucrative student housing market.
Get in touch
If you’d like to find out more about finding a BTL university property, please get in touch with us at Edinburgh Mortgage Advice.
Email [email protected] or call 0131 339 2281 to speak to us.
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