Student lets provide higher yields than professional renting – research

Buy-to-let returns in Durham and Warwick exceeded 10% with four more locations at more than 8%, according to data from Simple Landlords Insurance.

The firm found that Durham and Warwick topped the yields landlords could expect in 20 major university towns with 11.5% and 10.3% per year respectively.

It compiled the data by comparing the rental price advertised for student houses on popular roads with the estimated property values for 20 of the UK’s top universities.

However, a snapshot poll of 400 landlords found that 79% would not or had not considered renting to students.

The majority preferred to play it safe by only renting to professional working tenants, but the research found that student properties can command significantly higher rent than their estimated market value.

Rental value estimates from property website Zoopla for similar properties on the same street as the student houses were lower than the price advertised specifically to student tenants for 17 out of 20 towns.

Oxford saw the lowest yield at just 2.78%, according to the data.

Not reckless tenants

Simple Landlords Insurance director of underwriting Tom Cooper said there were some great investment opportunities for the minority of landlords who were prepared to rent to the student market.

“It’s not as risky a move as you might think,” he said.

“Often students don’t deserve their bad reputation. With university fees today’s students take their studies much more seriously, and many also work to see themselves through the semester.

“It’s not quite the hard-partying picture many have of student life.”

He added that analysis carried out by the firm’s underwriters suggested students were no longer the reckless tenants many believe them to be.

“Don’t miss out on a great investment opportunity and sky-high yields because of tenant type,” Cooper added.