Universities help to boost student rental yields by up to 2%

Landlords with student accommodation close to a university enjoy yields that are up to 2% higher than average, research reveals.

The findings from property developer Stripe Property Group show that student properties enjoy a yield that is, on average, 1.3% higher than rental homes in the wider area - and this delivers a £6,000 boost to a student landlord’s income.

The firm looked at the average yields that are available near a university and then at the yields that other rental properties enjoy.

Researchers found that across Britain, a student home near to a university will deliver an average yield of 5.2%.

Landlords with non-student rental homes

However, for landlords with non-student rental homes that are further away, their average yield is 3.9% - so student landlords see their returns getting a 1.3% lift.

When the figures are examined further, landlords in Wales see university yields that are 1.4% higher than the average, while in England they are 1.2% higher.

In Scotland, the yields are 0.7% higher.

There are also some interesting returns for the regions with landlords in the North East having properties that return 6.5% - whereas other landlords will get 4.5% - which is a 2% difference.

House close to a university

A house close to a university in the North East has an average cost of £185,000, and that is £27,076 more expensive than the overall regional average of £157,924.

Student properties near universities in the East Midlands are £30,411 cheaper than the average for the region, with a yield of 5.5%. That is 1.7% higher than other landlords who receive 3.9%.

For student landlords in Yorkshire & Humber, their homes are £33,973 cheaper with a yield of 6.2% - which is 1.6% higher.

In the East of England, student landlords enjoy a 0.9% premium, in the West Midlands it is 0.9% and in the South West it is 0.7%.

Landlords with student homes

For landlords with student homes in the North West it is 0.5%, and in the South East it is 0.4%.

However, student landlords in London do not enjoy higher yields - the only area where this happens.

That is down to the cost of property with the average house price of £1.1 million - that's nearly double the capital's £537,920 average.

As a result, student landlords have a yield of just 3.3% - which is 0.9% lower than the capital's average yield of 4.2%.

'Buy to let properties near universities is a safe bet'

James Forrester, the managing director of Stripe Property, said: "Buy to let properties near universities is a safe bet with a consistent stream of tenants means that voids can be reduced considerably.

"Perhaps more than any other demographic, students value location and convenience - getting to and from lectures makes a world of difference to students and they are willing to pay a premium for that."

The managing director of Accommodation for Students, Simon Thompson, said: "Demand for student accommodation is undoubtedly strong this year which will have an impact on yields.

"Student landlords still need to work hard to deliver a quality home that students enjoy - and want to rent - but investing in a buy to let close to a university will usually be a good move."

Students are having a cost-of-living crisis

Meanwhile, it has been revealed how hard the cost-of-living crisis is hitting students.

Research reveals that students are seeing inflation that is higher than the country's average at 14%.

The average student is now having to spend £924 every month - but in London, they are spending £1,089 on average.

Also, the Maintenance Loan is falling short of covering a student's needs by £439 every month.

The survey by Save the Student also reveals that one in 10 students have used a food bank in the past year.

Students worry about how they will make ends meet

Along with 82% of students worrying about how they will make ends meet and four in five have considered dropping out of university - with 52% doing so for cash problems.

The platform's money expert, Jake Butler, said: "The student financial situation this year is bleak.

"The huge £439 monthly shortfall between real living costs and Student Loans is alarming.

"Most students are struggling to bridge this gap and it's not fair for the government to 'expect' parents to contribute such a high amount."