0:06 AM, 10th September 2024, About A year ago
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Stoke-on-Trent has emerged as the UK’s top university town for landlords seeking high yields, according to a new analysis by Paragon Bank.
Its study of buy to let mortgage offers in popular student postcodes found that landlords in Stoke achieved an average yield of 9.43%.
Landlords in Stoke, who are providing accommodation to students studying at Stafford and Keele universities, benefited from an average annual rental income of £13,860.
The average student property in the city was priced at £146,944.
Paragon’s managing director of mortgages, Louisa Sedgwick, said: “Student property remains a popular choice for portfolio landlords because they can typically achieve higher yields than standard buy to let property.
“They also benefit from parental guarantees, so arrears are typically lower.”
She added: “The stronger performing locations based on our lending data shows that there’s a gravitation towards quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Liverpool followed closely behind Stoke with an average yield of 8.93%, followed by Edinburgh at 8.23% and York at 8.12%.
Coventry, serving Warwick University and the University of Coventry, rounded out the top five with a yield of 8.08%.
The bank’s analysis also highlighted the strong performance of Russell Group university locations.
It found that 13 of the top 15 yielding university towns and cities are home to Russell Group institutions, which are renowned for their research and academic excellence.
Overall, student property across the UK achieved an average yield of 7.04% in July, a significant increase from 6.12% in the same period two years ago.
Paragon’s head of surveyors, Neil Smith, said: “Portfolio landlords usually have in-depth knowledge of local student markets to the point where they know the prime local areas and even the favoured roads that provide a strong sustainable student rental demand.
“With demand for university places forecast to rise over the next few years, there will be greater need for student accommodation.”
He added: “Some of this will be met by purpose-built student accommodation (PBSA), but the traditional student property provided by private landlords will remain very much part of the mix.”
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