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Smaller towns and cities offer best student rental yields

  • 09/10/2023
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Smaller towns and cities offer best student rental yields
The best rental yield from student lets can be found in smaller towns and cities such as Stoke-on-Trent as opposed to larger places, research has found.

According to analysis from Paragon, the average rental yield for a student let came to 6.66 per cent in August this year, up from average of 5.63 per cent in September 2020.

Stoke-on-Trent reported the largest rental yield at 9.42 per cent, with the average rental income coming to £13,730 and average valuation pegged at £145,813.

This was followed by Swansea at 9.22 per cent, with the average rental income set at £18,695 and average valuation estimated at £202,750.

Crewe took third position with the average rental yield pegged at 8.88 per cent and the average rental income £15,154 and the average valuation is £170,772.

Glasgow is the only place in the top 10 with a population exceeding half a million with properties valued at £211,729 on average, landlords generate an annual rental income of £17,109, yielding 8.08 per cent.

The city took seventh position.

The list in full is Stoke-on-Trent, Swansea, Crewe, Gloucester, Aberdeen, Hull, Glasgow, Plymouth, Salford and York.

Richard Rowntree (pictured), mortgages managing director for Paragon Bank said: “Our latest analysis highlights how yields achieved by landlords serving the student market have consistently grown over the past few years.

“This coincides with rising tenant demand seen across the private rented sector and particularly in the student market, driven by record-high numbers of university applications going through UCAS.”

He continued: “We continue to see that it is often properties found in smaller towns and cities that deliver the best returns for landlords.

“Despite not typically attracting the largest student populations, these locations can benefit from property that is more affordable to purchase, whilst having less competition from purpose-built student accommodation, with the highest concentrations of large developments usually found in major cities like London, Birmingham and Manchester.”

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