Best University Towns for Buy-to-Let Investors

Aberdeen University, pictured above

We’ve put together a list of the most profitable student towns for buy-to-let landlords to invest in. These are our top 10 locations offering the greatest yields for letting a property.

Student accommodation is a lucrative Market with consistent demand and a revolving door of rentiers and potential tenants. Strong demand as well as high yields offer savvy investors excellent returns on investment.

Many of the items on the list are in Northern cities or outside of England due to the low price of property.

London Schools, as well as Oxford and Cambridge, are nowhere to be seen as they require a significant upfront investment. This eats significantly into profit margins so these locations are ones to avoid.

Scotland (especially Dundee, Aberdeen and Strathclyde) 7.2, 6.8, 6.6% yield

Scottish universities frequently top lists of best buy-to-let locations so we’ve included a slew of the best spots to make an investment in. House prices are typically lower than many other places in the country so it’s easy to make a killing from buy-to-let.

Leicester (6.6)

Another affordable city with a strong student market, most landlords choose to invest on the outskirts of the city centre, close to the university grounds. Rents have been increasing steadily each year alongside house prices so this is an excellent location to get into while you still can.

Birmingham (6.5)

Birmingham has a significant population of young people with roughly 40% of its citizens being under the age of 25. Many of these people are graduates and young professionals although many more are students and potential rentiers. Popular areas, aside from the city centre, include South Birmingham and near Edgbaston.

Leeds (6.4)

With a population of around 65,000 students and five universities, there is a significant demand for student accommodation in Leeds. This is a symptom of a wider change as more young people are looking outside of London, driving up rents here and in other major cities such as Manchester and Birmingham.

Nottingham (6.4)

A reliable location for buy-to-let investments, Nottingham has been a mainstay on many investor’s radar’s for years now. There are two major universities: Nottingham Trent and Nottingham and investors targeting the former see noticeably higher yields. Those looking for Nottingham Trent students would do well to look at property in the Arboretum district while Lenton and Dunkirk houses cater to Nottingham university.

Newcastle upon Tyne (6.3)

Newcastle, alongside many other locations in the North East have a claim to being the cheapest locations in the country when it comes to property prices, however, this is unlikely to last forever as investors have caught on to this good deal and prices are starting to rise. There is a sizeable student population of approximately 23,000, many of which are from abroad, attracted by the respectable university.

Liverpool (6.1)

A major city with a large student population, Liverpool has lots of opportunities for landlords looking to get into student accommodation. Evidence shows that Liverpool is one of the cheapest major cities in the UK and, combined with the high demand for student housing, this is a great investment opportunity.

Cardiff (5.9)

Cardiff is home to three separate universities and, at the time of writing, 20% of the population are students. Cardiff University’s Russell Group status as well as the consistent and generous investments in the area make it an attractive student city and an area for buy-to-let landlords to consider.

Southampton (5.4)

Southampton is a world leading research university in numerous different subjects and is a popular destination with wealthy foreign students looking for a top-class education. Property prices are a little on the steep end (especially compared to other locations on this list) so investors should be prepared to cough up a decent sum on a property.

Belfast (5.3)

Belfast has, perhaps, developed a bad reputation over the past few decades but this is no reason for landlords to keep away. There is a strong demand from students and young professionals in the city for affordable accommodation providing an excellent opportunity for the right landlord. The low cost of entry and presence of respectable universities is a great selling point for Belfast.

FAQ: Why Are Student Towns So Profitable to Buy in?

In student towns there are high demand for rental properties from students, creating a consistent rental income stream for whoever invests in them. Student populations drive housing demand, leading to property value appreciation. Thanks to the academic calendar, these short-term leases minimise any vacancy periods. These accommodations are also close to universities and their amenities, again increasing the properties desirability.

FAQ: What Should You Consider When Investing in Buy-to-Let Properties in Student Towns?

There are a few things you should think about before investing in buy-to-let properties in student towns. For example, how close is the property to the university, what local amenities like bars and restaurants are nearby, how safe the town is overall, and how good are the transport links? To create leases that minimise property vacancy time, research student population size and preferences for property types, as well as become familiar with the academic calendar year. But, as always, Of course, you should always consider the property's rental yield. Also, always keep in mind the potential maintenance costs that frequently accompany student housing.

"We've put together a list of the most profitable student towns for buy-to-let landlords to invest in. These are our top 10 locations offering the greatest yields to buy a property in."