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Towns and cities with one university have best rental yields – Paragon

  • 05/09/2022
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Towns and cities with one university have best rental yields – Paragon
Towns or cities with one university usually achieve the highest rental yields, with of eight of the top 10 yielding university towns and cities falling into this category.

According to research from Paragon, Derby comes top in rental yield, with rental yield for student properties coming to nearly nine per cent. The University of Derby has around 21,285 students, with an average rental income coming to £23,544 and average valuation pegged at £271,563.

This was followed by Pontypridd in South Wales with rental yield coming to over eight per cent. The University of South Wales has 23,150 students, average rental income of £9,918 and average valuation of £119,321.

Hull came third in the list, with rental yields also coming to over eight per cent. The university in the town has over 14,615, average rental income of £14,005 and average valuation of £172,429.


Top rental yields for UK university towns and cities

Location Average rental income Average valuation Rental yield Universities (number of students)
Derby £23,544 £271,563 8.67% University of Derby (21,285)
Pontypridd £9,918 £119,321 8.31% University of South Wales (23,150)
Hull £14,005 £172,429 8.12% University of Hull (14,615)
Salford £17,228 £215,326 8.00% University of Salford (23,955)
Lincoln £16,163 £202,835 7.97% The University of Lincoln (17,565)
Worcester £26,268 £331,765 7.95% University of Worcester (10,110)
Liverpool £24,780 £314,589 7.88% University of Liverpool (29,185)

John Moores University (27,200)

Liverpool Hope University (5,685)

Plymouth £32,226 £417,905 7.71% University of Plymouth (18,905)
Coventry £27,868 £362,405 7.69% Warwick University (28,110)

Coventry University (39,145)

Durham £31,664 £420,441 7.53% Durham University (20,645)

Source: Paragon


Biggest not necessarily best

The other top yielding locations include Salford, Lincoln, Worcester, Liverpool, Plymouth, Coventry and Durham. Coventry and Liverpool are the only two on the list with more than one university.

Richard Rowntree, mortgages managing director for Paragon Bank, said: “Although major cities like London, Birmingham and Manchester often boast the largest student populations, they are not necessarily the best locations for generating yields in the student buy-to-let market. This is because such places are more likely to be home to purpose-built student accommodation and greater levels of competition, whereas smaller cities and towns have less competition from large-scale institutional investment.

“Something else we often see when looking at the best yielding student locations is relatively affordable property – the top five locations for yield have property valued below the national average of £278,000. Another common trend the top 10 yielding locations share is that they have smaller private rented sectors serving the student market.”

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