Student hubs dominate buy to let hotspots - Paragon

Postcodes popular with students have reached the list of the top 10 locations for attracting the most ‘buy to let’ investment, research reveals.
Cardiff's CF24 postcode, encompassing Cathays and Roath, emerged as the top choice for BTL investors in 2024, according to Paragon's lending data.
This area, popular with students attending Cardiff's three universities, offers landlords an average rental yield of 8.7%.
The research also highlights that areas with large employment markets also do well with Birmingham's B29, which includes Selly Oak, home to Queen Elizabeth Hospital and the University of Birmingham, secured second place, providing a 7.5% yield.
Plymouth's PL4, with the University of Plymouth and Mount Gould Hospital, ranked third, boasting a 9.6% return.
Buy to let landlords
Paragon's head of surveyors, Neil Smith, said: "Looking at last year's most popular postcodes amongst Paragon's buy to let landlords highlights geographical concentrations of investment.
"Even though privately rented homes are in short supply all over the UK, landlords are strategic and often target locations with consistently high demand; cities where we see large transient populations, such as students and temporary workers, alongside more permanent residents like young professionals and families.
"There is also a notable propensity amongst buy to let landlords to invest in property types that can deliver strong yields, often terraced houses and HMOs."
Other favoured postcodes for BTL investors include LS6 (Leeds), NG7 and NG3 (Nottingham), M14 (Manchester), GL1 (Gloucester), and locations in Liverpool and Stoke.
Terraced houses were the preferred investment property in most locations, with converted flats favoured in Nottingham's NG3.
North East outperforms London in rental yields
Paragon's report coincides with research from Benham and Reeves which shows the North East has outperformed London in rental yields over the past five years.
The North East averaged 4.84%, while London achieved 4.42%.
The firm also says that the North West saw 4.38%, Yorkshire and the Humber 4.29% and the South West 4.03%. The East Midlands had the lowest yield at 3.83%.
Marc von Grundherr, a director of the agency, said: "We've seen a particularly strong performance across the North, with a lower cost of investment contributing to favourable yields.
"However, where London is concerned, the returns on offer are being very much driven by a buoyant rental market, fuelled by an overwhelming level of tenant demand."
Student landlord looking for investment opportunities
The managing director of Accommodation for Students, Simon Thompson, said: "If you're a student landlord looking for promising investment opportunities in the UK, the 2024 data paints a clear picture.
"Locations with large student populations, like Cardiff's CF24 and Birmingham's B29, continue to be magnets for buy to let investment, offering attractive rental yields."
He added: "While student markets offer strong potential, investors should appreciate whether a particular location could appeal also to other tenant cohorts, so the investment will remain profitable should there be a downturn in the student accommodation market."