Looking to make a buy-to-let investment on student property? Wondering where the best buy-to-let areas are?
Updated for 2017
Property investment company Aspen Woolf have published a list of the best buy-to-let student towns in 2017, helping you maximise your return on investment. The results this year take in a wide net of the UK, with north and south both representing.
Before you dive in, here’s a quick list of our most popular buy-to-let content, for landlords looking for the best areas to make a smart investment.
- Are your properties in one of the UK’s best buy-to-let areas for growth?
- Best buy-to-let areas in the UK - updated for 2018
- Best buy-to-let areas in Southampton in 2018
- What is landlord insurance?
Best places to buy-to-let
If you’re looking to join the ever-expanding student buy-to-let market, you’ll want to know the basics. With demand for student housing only increasing, investors will be watching a rise in Purpose Built Student Accommodation (PBSA), with certain areas of the UK more able to seize the opportunity, and build fast.
But before you get to grips with the dos and don’ts, you should consider where the best buy-to-let opportunities are for 2017. These are in no particular order, and all are reporting potential rental yields of 7-8 per cent, making them five of the best buy-to-let student towns in 2017.
Port cities tend to boast much-loved universities and higher education (HE) centres, and Plymouth is no exception. This south-west hotspot owes much of its housing success to the University of Plymouth, which ranks in the top 2 per cent of universities in the world.
Aspen Woolf reports its student population at around 23,000, with the university able to house around 12 per cent. Competition amongst students to find affordable housing is fierce, making it one of the best buy-to-let student towns (for investors, that is) in 2017, with potential yields of 8 per cent.
It may be a great area to invest in by-and-large, but do pick your tenants carefully. We recently reported on a landlord in Plymouth left with £10K of damage, and although it’s an edge case, nightmare tenants are found in the best areas.
Moving north, you’re in the traditional student housing sweetspot. But with fluctuations in investment, some of the big cities are falling behind, making way for newly-boosted towns and cities, such as Huddersfield.
Aspen Woolf highlights the £74 million regeneration of Kirklees College’s Waterfront Campus, along with former University of the Year, The University of Huddersfield. And there are at least another two excellent HE institutions in Huddersfield to mop up extra potential.
The area’s student population is around 40,000, with potential yields of 9 per cent.
Back in the south-west, Bristol has always been a favourite amongst young people, from budding engineers and tradespeople to creatives and medics. There are two big universities to get to know, The University of Bristol and and The University of West England (UWE).
Another point in Bristol’s favour is its great rates for employment after higher education (entry level and beyond), along with good transport links into London and other major cities. This means that graduates who like the city tend to stick around, still well-within the market for affordable student housing.
With continually strong investment and major regeneration of the city since the 1990s, Bristol’s student population stands at around 50,000 with potential yields of 8 per cent.
Zig-zagging north, Liverpool is seeing huge regeneration right now. It’s famously a ‘student-dominated’ city, and whilst that’s contentious for non-student locals, it spells rewards for investors searching for the best buy-to-let student towns.
The big four HE institutions in and around Liverpool are The University of Liverpool. Liverpool John Moores, Liverpool Hope and Aspen Woolf also points out the Liverpool Institute for Performing Arts (LIPA).
These four combined are attracting a student population of around 67,000, with potential yields of 8 per cent.
The North just clinches it, with Leeds also making the top five best buy-to-let student towns list. From The University of Leeds to Leeds Beckett University and Leeds Trinity University, top institutions have drawn a population of around 70,000 students (the biggest on this list), with only about 13 per cent catered for by university accommodation.
In fact, we reported in 2016 that buy-to-let investment in Leeds was potentially a more profitable choice than London, with 81 per cent of our poll agreeing.
It’s a popular city for tenants and investors alike, so you need to know what you’re looking for, and be quick to spot a deal. Potential yields stand at 8 per cent/year.
Where to avoid buying property
Research from StudentTenant.com this year agreed with the north coming out on top for the best buy-to-let student towns in the UK. But it identified Cambridge as having the worst rental yield at 2.7 per cent, with Oxford not doing much better, at 3.9 per cent.
Chester also came out pretty badly, being second-worst on the list with rental yields struggling at around 3.04 per cent. Chelmsford, Wolverhampton and Carlisle also showed disappointing yields not much beyond 3 per cent.
Finally, London is always a hard area to compare like-for-like, but reporting an average 3.25 per cent yield this year, it ranks well below its northern rivals as things stand.
Don’t just bank on rental yields
Just as the most prestigious universities don’t make for the most lucrative student housing investment, it’s not always rental yields that forecast the best buy-to-let student towns. Don’t forget to factor in the ‘summer lull’, in which so many student properties are virtually unrentable, and bear in mind too that students bring their own risks, as tenants.
Use our article to cross-off the areas that are more likely to cost you money in property damage and rent arrears, and do your research thoroughly before making a decision. There’s also our dos and don’ts of student rental checklist and student landlord rights and responsibilities refresher, to keep handy while you’re preparing.
Are you looking to rent to students? Where would you decide to purchase a property? Let us know in the comments below!