The UK’s student accommodation sector is booming as students return to
campus, figures reveal.
In addition, one survey also highlights which university towns are offering
the best buy to let rental yields for landlords.
However, it is the data from the Deposit Protection Service (DPS) that
reveal that students are now returning to university in ever greater
numbers.
They say that there were 25% more students registering their deposits from
August to October this year, compared with the same time last year.
‘Significantly more deposits’
The managing director of the DPS, Matt Trevett, said the organisation is
registering ‘more deposits’ in areas that traditionally have high student
populations in England and Wales.
He added: “This indicates that students are growing confident in signing up
for a tenancy near their university when compared with last year.”
Mr Trevett says that the fall in deposit registrations from students last
year was ‘clearly down to the Covid-19 pandemic’, and the health
restrictions that were put in place.
He said: “This year, the increase follows an extensive vaccination
programme rollout and the loosening of restrictions that affect student
living, such as meeting people and travel.”
Deposits being registered in student areas in England and Wales
The DPS says that August was its busiest month yet for deposits being
registered in student spots in England and Wales which were 53% higher than
for August last year but also 23% more than in August 2019 and 42% higher
than student area deposits registered in August 2018.
August was also the sixth month running, the DPS says, where deposits being
registered in popular student areas were more than for a corresponding
month last year.
The managing director of Accommodation for Students, Simon Thompson, said:
“This is good news from the DPS which shows that demand from students for
quality student accommodation is strong in the run-up to the autumn term.
“There’s no doubt that students still want to enjoy the student experience
and live in a shared home with friends.”
The university towns with the best rental yields
Meanwhile, a new analysis by the mortgage broker Trussle has revealed which
university cities and towns deliver the best rental yields.
Their findings reveal that student buy to let properties have consistently
outpaced the rest of the rental sector for rental yields by as much as
17.86%.
The best university destination for landlords, according to their research,
is Newcastle where landlords could earn a yield of 9.4%.
The next most popular destination is Southampton with a yield of 8.94%,
followed by Cardiff with 7.64%.
Best university destinations for BTL rental yields
The top five best university destinations for BTL rental yields sees
Reading in fourth place with 7.5%, and then Manchester with 7.39%.
Trussle’s head of mortgages, Miles Robinson, said: “Property is still seen
as a reliable and safe way of generating extra income.
“This can be in the short-term, through rent collection, and in the
long-term with gains in house prices.”
He added that the current low interest climate means that a landlord can
lock-in to competitive buy to let mortgages to take advantage of demand.
Cheapest university towns for a landlord to buy a rental property
To underpin their research, Trussle has also revealed the cheapest
university towns in the UK for a landlord to buy a rental property.
The best university destination is Belfast with an average house price of
£152,175, followed by Aberdeen with a house price of £154,480 and Dundee is
in third place with a house price of £174,173.
The top five of the cheapest university towns or cities for landlords to
buy BTL properties sees Newcastle in fourth place with an average house
price of £192,567, and Glasgow with an average price of £193,388.
Trussle also found that two in three parents would consider investing in a
buy to let property for their child while attending University to help with
their living costs.
Indeed, 53% of parents said they would consider downsizing to help support
their child’s further education and this suggests that property looks set
to play a big role in helping students through university.
