Cheaper student cities lead landlord yields

Middlesbrough leads the student property market for potential landlord returns, with an average gross advertised yield of 24.3%.

That’s according to Accommodation for Students research which found the town also appeared among the cheapest places for students to live in its previous affordability research.

Across England and Wales, the average gross advertised yield was 8.4%.

The analysis covered 22,107 privately marketed student properties across 61 cities and 312 named student areas.

Student landlord returns

The firm’s managing director Simon Thompson said: “What is particularly interesting is that several of the locations producing the strongest gross yields are also among the more affordable places for students to rent.

“Middlesbrough, Hull and Stoke-on-Trent all appeared near the top of our affordability research and now feature among the five highest-yielding markets.”

He added: “Gross yield is an important starting point, but it is not the same as profit.

“Landlords still need to consider achievable rents, local student demand, void periods, licensing, finance and running costs before deciding whether an individual property represents a sound investment.”

Property prices matter

Hull took second place in the yield rankings at 12.8%, followed by Wolverhampton, Plymouth and Stoke-on-Trent.

The research points to the performance of several northern and Midlands university locations to relatively affordable property prices.

In Middlesbrough, average advertised annual rent income of £24,326 was measured against an average local property value of £100,019.

London, however, produced a gross yield of 5.2%, with its higher annual advertised income of £36,166 set against an average property value of £697,910.

Student property sizes

Flats with three or more bedrooms produced the highest average gross yield by property type, at 12.5%.

Among houses, those with six or more bedrooms averaged 9.4%, compared with 5.2% for homes with one or two bedrooms.

Adding another bedroom did not always correspond to a higher return: five-bedroom houses averaged 7.0%, below the 8.4% recorded for those with three or four bedrooms.

Meanwhile, the leading location varied by property type, with Nottingham recording the highest yield for houses with six or more bedrooms.

Newcastle is the leading destination for flats with at least three bedrooms.