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.”
