Student rental properties are delivering stronger yields than the wider buy-to-let market, with landlords in Stoke-on-Trent achieving average returns of 9.42%, new analysis reveals.
Paragon Bank data shows properties in known student postcodes generate an average yield of 7.32%, compared with 6.86% in non-student postcodes.
Stoke-on-Trent tops the lender’s ranking of university locations, based on average annual rental income of £14,222 against an average property valuation of £150,982.
Plymouth follows with a 9.27% yield, while Liverpool completes the top three at 8.86%.
REGIONAL RETURNS
Portsmouth and Cardiff produce average yields of 8.31% and 8.27% respectively, followed by Edinburgh at 8.23% and Coventry at 8.16%.
York and Leeds also deliver returns above 8%, while Nottingham, Loughborough, Sheffield, Durham, Exeter and Southampton complete Paragon’s top 15.
The analysis, based on Paragon mortgage applications in known student postcodes, also shows that high returns are not restricted to areas dominated by Russell Group universities.
Although Liverpool, Cardiff, Edinburgh, York, Leeds, Nottingham, Sheffield, Durham, Exeter and Southampton all feature in the ranking, the two highest-yielding locations – Stoke-on-Trent and Plymouth – are outside the Russell Group.
STUDENT DEMAND
Louisa Sedgwick (main picture), Managing Director of Mortgages at Paragon Bank, says: “As students prepare for the start of a new academic year, these figures demonstrate the strength and breadth of the university rental market.
“Cities with Russell Group universities feature prominently, reflecting the large and established student populations found in many of these locations.
“However, the strongest yields are not confined to Russell Group markets. Stoke-on-Trent and Plymouth occupy the top two positions, showing how locations with comparatively accessible property values and strong student demand can offer attractive returns.”
Sedgwick adds: “Student property is a specialist market, so landlords need to understand local demand, the type and quality of accommodation students require and the responsibilities associated with managing shared homes.
“Those who approach the sector professionally can play an important role in providing good-quality homes while building a sustainable business.”
Top yielding student locations
| Location | Average rental income | Average valuation | Yield |
| Stoke-on-Trent | £14,222 | £150,982 | 9.42% |
| Plymouth | £35,224 | £379,881 | 9.27% |
| Liverpool | £26,399 | £297,951 | 8.86% |
| Portsmouth | £39,215 | £472,121 | 8.31% |
| Cardiff | £32,344 | £390,983 | 8.27% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| Coventry | £28,952 | £354,858 | 8.16% |
| York | £39,360 | £484,958 | 8.12% |
| Leeds | £38,868 | £485,464 | 8.01% |
| Nottingham | £30,702 | £385,185 | 7.97% |
| Loughborough | £27,955 | £355,520 | 7.86% |
| Sheffield | £26,866 | £342,659 | 7.84% |
| Durham | £37,112 | £474,942 | 7.81% |
| Exeter | £44,659 | £579,036 | 7.71% |
| Southampton | £29,178 | £380,648 | 7.67% |
Source: Paragon Bank
