Where student landlords will see the best yields

According to The Mistoria Group, landlords with student properties in the North West outperformed standard buy to let properties for return on investment and yield.

The research also reveals the average gross return - before voids or charges are deducted - has risen by between 11% and 13%.

The average gross return of other buy to let properties in the North West is between 6% and 8%.

Investors with a student HMO property

And over the past five years, investors with a student HMO property have also enjoyed higher returns than other investors.

They say that HMO investors enjoyed returns that were between 10% and 15% on average, compared with the 5% and 10% average enjoyed by other BTL investors.

The group's managing director, Mish Liyanage, said that HMOs are a crucial part of the housing sector in the UK and offer affordable accommodation to students.

He said: "In the North West, we are seeing demand growing for HMO student property because it offers high occupancy rates, good capital growth and excellent yields."

The report highlights that HMOs are becoming a popular investment in Salford, Manchester, and Liverpool.

HMOs within walking distance of university

Mr Liyanage added: "Investors need to be cautious, however, and buy a property in the right area because yields can vary by postcode dramatically. HMOs that are in walking distance of university, or a short train or bus journey, will have the highest rents usually."

The managing director of Accommodation for Students, Simon Thompson, said: "Quality student properties close to a university campus will always be popular and command high rents and deliver better yields. The future of student accommodation is still looking strong, even with the potential of another Covid-19 lockdown potentially affecting student courses."

Lack of students sees London rents fall

Meanwhile, the lack of students in London is leading to rents in the capital being reduced.

The findings from Chestertons, one of London's largest lettings agencies, says there were twice the number of rental homes available in September compared with last year.

This has led to a 325% spike in the number of landlords reducing their rent, they say.

Chestertons says that September is usually their busiest month with overseas tenants returning to London, plus large numbers of students signing up for properties after London’s universities confirm places.

The firm's head of lettings, Richard Davies, said: "It is clear, however, that sensibly priced properties in this market will find tenants, and landlords are quickly reacting and adjusting prices accordingly."