A survey of more than 580,000 properties across England, Scotland, and Wales by TotallyMoney, which ranked postcodes in order of highest buy-to-let yields, to lowest, found that locations with a high student population, like Nottingham, Liverpool, Manchester, Leeds, and the North East, offer some of the UK’s highest rental yields.
Properties in Nottingham, which has a student population of over 37,000, appears to offer particularly good returns, with two postcodes featuring in the top five.
NG1 takes first place with an average rental yield of 11.99 per cent, and NG7 takes fifth place with an average yield of 8.89 per cent.
Property prices are also affordable, averaging £152,631 and £160,269 respectively – far below the UK average of £226,906.
Liverpool ranks in second place, with two postcodes in the top five, and five postcodes in the top 20. It has an approximate student population of 70,000, as well as three universities, which is thought to contribute highly to its strong yields.
Postcode L7 takes second place and has average rental yields of 9.79 per cent. L1 also performs well, taking fifth place, with average yields of 9.33 per cent.
Newcastle’s NE6 takes sixth place, with an average rental yield of 8.43 per cent.
Property prices here are far below the UK average at £118,789, with Newcastle and Northumbria universities approximately 30 minutes away on public transport.
Similarly, Newcastle’s NE1 has yields of 8.16 per cent, and is within walking distance to both universities. Property prices, however, are slightly higher at £161,035, but are still below the UK average.
In stark contrast, London struggled to perform well compared with its UK counterparts.
TotallyMoney’s head of brand and marketing communications, Mark Moloney, said: “With students flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords.
“Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.
“But, due to the tenant fee ban, changes in mortgage tax relief, and tighter buy-to-let lending criteria, rental profits are now being squeezed more than ever.
“To maximise their returns, landlords need to be savvier — and that’s where our map and mortgage comparison tool can help.”
Source: Simple Landlords Insurance