Northern University Cities Dominate Best Investment Hotspots

Northern university cities dominate the list of the best buy-to-let investment hotspots in the UK, according to recent figures.

Research found that half of the top 20 best buy-to-let investment hotspots are in northern university cities. Manchester – home to the University of Manchester and Manchester Metropolitan University – offers buy-to-let landlords a potential average rental yield of 6.73% – the best in the UK.

In addition, Salford – in the metropolitan borough of Greater Manchester – offers investors a very respectable student property yield of 6.68%.

Northern University Cities Dominate Best Investment Hotspots

Portsmouth – home to the University of Portsmouth – came in third place, with an average yield of 5.75%. Meanwhile, Leeds, Cardiff and Coventry were close behind, with average returns of 5.67%, 5.59% and 5.59% respectively.

Plenty of UK cities saw growth in average yield, with Hull – where the University of Hull is based – experiencing the greatest average yield increase of 0.31%, closely followed by Luton – home to the University of Bedfordshire – with a rise of 0.31%, and Rotherham, at 0.28%.

The study also found that cities hosting the very best UK universities were not necessarily the best locations for buy-to-let investors.

Despite being home to the fourth best university in the world and boasting alumni such as Charles Darwin, Isaac Newton and Stephen Hawking, Cambridge actually has the worst average rental yield, at 2.7%.

Oxford – host to the current number one university in the world – also followed this trend, with an average return of 3.9%.

Chester was found to be the second worst investment hotspot for landlords. Home to the University of Chester, the city recorded an average rental yield of just 3.04%.

Chelmsford, home to Anglia Ruskin University, followed closely behind, at 3.07%, with Wolverhampton and Carlisle not far off – 3.27% and 3.29% respectively.

Even London – home to King’s College London, the London School of Economics and the University of London – recorded an average rental yield of just 3.25%, ranking the fourth worst in the UK.

It seems that the best investments really are found in northern university cities!

Danielle Cullen, the Managing Director of StudentTenant.com, comments on the findings: “For anyone looking into investing into student property, it’s important to assess the potential yields in the area. It’s really interesting to see that the cities that contain the best universities actually offer the worst yields, and just a little bit of research will uncover this for potential investors.

“Yield is a bit of a buzzword for investors, but often, a lot of people don’t actually know how to work them out, or how valuable knowing that information is. I would strongly advise spending a bit of time learning about the importance and how you can optimise them to ensure you get the best possible return on investment.”

She continues: “I would also express though that yields aren’t everything you need to know. There are a lot of other factors a landlord should consider before investing, such as proposed vacancy rates. For example, if the property will be vacant over the summer in a student let. Or, if it’s more attractive for a certain type of tenancy, such as short-term lets where there is likely to be a higher rate of vacancy, but perhaps the potential of higher rents.”