Student properties in the North and Scotland offer the best returns for landlords

Landlords looking for a lucrative investment opportunity should consider buying student properties in the North of England and Scotland, research reveals.

The data from easyMoney ranks the top 100 UK universities based on the average yields of properties in their postcodes, using house price information and rents from various sources.

The findings show that the University of Sunderland offers the highest yield of 10.1%, followed by the University of Aberdeen with 9.3% and Liverpool John Moores University with 8.9%.

The University of Leeds and the University of Dundee also made it to the top five, with yields of 8.8% each.

Students offer a solid stream of income

The chief executive of easyMoney, Jason Ferrando, said: “Landlords can get nervous when renting to students, but they provide you with a solid stream of income year-on-year that should more than pay for the potentially higher maintenance costs.

“The strongest yields are around universities in either the North of England or Scotland, where low house prices make it easy to turn a solid profit.

“This is particularly the case in Sunderland, where modest house prices should make it an attractive place for a first-time investor looking to start their portfolio.”

He added: “On the other hand, it’s trickier around pricier areas in London, with their high house prices making it more worth your time to invest elsewhere.”

Rental properties near universities tend to have higher yields

The lending platform’s research also reveals that rental properties near universities tend to have higher yields than the national average, which stands at 5.2%.

The average yield for university postcodes is 5.4%, with many areas offering much higher returns to investors.

Regional differences in the property market are also revealed with London and the South East lagging behind other parts of the country for yields.

The capital’s high house prices make it difficult for landlords to achieve a good return on their investment, even with high rents.

Lowest yields for student landlords

The lowest yields for student landlord investors were found near the University of Worcester (2.7%), Imperial College London (2.8%) and King’s College London (2.9%).

The University of Oxford and the University of Cambridge also had relatively low yields of 4% and 4.6% respectively, despite being among the most prestigious and popular universities in the world.

Some other areas to avoid include Aberystwyth University in Wales (3.1%), Edge Hill University in Lancashire (3.3%) and Loughborough University (3.6%).