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Scottish university cities dominate student buy-to-let investment league

12th September 2015

  • Edinburgh tops student buy-to-let league - Aberdeen, Dundee and Glasgow also make the top ten
  • Northern uni cities struggle - Middlesbrough, Lancaster and Lincoln rank among worst performers
  • Nationwide, the average gross yield on a four-bed property now stands at 3.92%
  • University cities in Scotland offer the best areas for profit for buy-to-let investors in the UK, according to research released today by property website Zoopla.

    Its research found that Edinburgh – home to the University of Edinburgh – offers buy-to-let landlords an average rental yield of 6.11%, the best in Britain. In addition, Aberdeen, where Aberdeen University was founded, was third in the buy-to-let investment league table, with an average yield of 5.66%.

    Dundee, birthplace of Dundee University, came fourth, posting a 5.11% average yield. Glasgow – place of Nicola Sturgeon’s alma mater, Glasgow University – achieved fifth place on the back of average yields of 5.07%. Amid the Scottish high-performers, Coventry, which gives its name to the university in the town, came in at second place, with a 6.03% average yield.

    By contrast, university cities in the North of England were found to be among the worst investment opportunities for buy-to-let landlords. Middlesbrough, where the main Teesside University campus is located, recorded the lowest average rental yield in the UK – a mere 1.47%. The North Western city of Lancaster, home to Lancaster University, was the second-worst performer, with a 1.87% yield, while Lincoln University’s host city, Lincoln, posted an average yield of 2.14%, the third-lowest in the league table.

    The research shows the cities hosting the very best universities are not necessarily the very best options for buy-to-let investors. Cambridge, home to the university that boasts alumni such as Isaac Newton and Charles Darwin, failed to make it into the top ten of the student buy-to-let league, posting a below-par average yield of 3.65%.

    Even London – where the world-famous London School of Economics and Imperial College London are located – registered an underwhelming 3.97% average yield, and so also didn’t feature in the top ten. Oxford, whose university is almost a thousand years old, only managed eighth place in the league table, with an average 4.61% yield.

    Across the UK, the average rental yield on a typical four-bedroom property is now 3.92%.

    Lawrence Hall of Zoopla commented: “Scottish university cities are currently offering fantastic returns for UK landlords. Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments. This means demand for rental accommodation in university areas is very high, as throngs of students compete to live near their campuses. Combined with Scottish house prices still remaining relatively low, this equates to excellent yields.

    “Some may be surprised that the golden triangle of London, Oxford and Cambridge are not producing higher yields. However, given those areas have a pedigree of high property prices, buy-to-let investors there would likely spend a higher proportion of rental income paying off their properties’ mortgages than their counterparts north of the border.”

    Best student buy-to-let towns

    Rank University Town Avg. Monthly Rent (4 bed house) Avg. Asking Price (4 bed house) Gross Yield
    1 Edinburgh (University of Edinburgh) £2,171 £426,774 6.11%
    2 Coventry (University of Coventry) £1,780 £354,449 6.03%
    3 Aberdeen (University of Aberdeen) £1,912 £405,153 5.66%
    4 Dundee (University of Dundee) £1,029 £241,743 5.11%
    5 Glasgow (University of Glasgow) £1,187 £280,787 5.07%
    6 Warwick (University of Warwick) £1,924 £482,569 4.78%
    7 Chichester (University of Chichester) £1,891 £480,152 4.73%
    8 Oxford (University of Oxford) £2,148 £559,312 4.61%
    9 Bolton (University of Bolton) £1,140 £298,472 4.58%
    10 Wrexham (Glyndwr University) £1,043 £276,320 4.53%
    Source: Zoopla (August 2015)

    Worst student buy-to-let towns

    Rank University Town Avg. Monthly Rent (4 bed house) Avg. Asking Price (4 bed house) Gross Yield
    1 Middlesbrough (University of Teesside) £314 £256,367 1.47%
    2 Lancaster (University of Lancaster) £473 £303,808 1.87%
    3 Lincoln (University of Lincoln) £469 £263,186 2.14%
    4 Carmarthen (Trinity St. David University) £582 £308,049 2.27%
    5 Hatfield (Hertfordshire University) £2,046 £1,017,352 2.41%
    6 Sunderland (University of Sunderland) £513 £245,243 2.51%
    7 Swansea (University of Swansea) £714 £319,431 2.68%
    8 High Wycombe (Univ. of Buckingham) £1,472 £624,397 2.83%
    9 Derby (University of Derby) £769 £307,415 3.00%
    10 Aberystwyth (University of Aberystwyth) £807 £315,296 3.07%
    Source: Zoopla (August 2015)

    - Ends -

    For further information, please contact PR Team on pr@zoopla.co.uk or +44 (0)20 3873 8770.

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