The best universities for a buy-to-let investment

18th January 2021

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The best universities for a buy-to-let investment

UniHomes, the UK’s leading student accommodation platform, has revealed which universities currently offer the best option for landlords in the student sector.

UniHomes analysed market data around the top 50 UK universities to find which offer the most profitable buy-to-let investment based on the current average rental yield in each university postcode. 

The figures show that the University of Southampton is the UK’s best buy-to-let university at present. Located in the SO17 postcode, the area is home to an average house price of £226,489 while the current average rent sits at £1,388 per month. As a result, a buy-to-let in the university’s postcode currently offers an average rental yield of 7.4%. 

Nottingham is the second-best bet for a profitable bricks and mortar investment in the buy-to-let sector. The University of Nottingham’s NG7 postcode is home to an average rental yield of 7%, while Nottingham Trent’s NG1 postcode comes in slightly lower at 6.7%. 

The NE1 postcode, home to Newcastle University, also ranks within the top five with an average yield of 6.3%, along with the University of Dundee (6%).

The Universities of Cardiff (5.9%), Leicester (5.9%), Strathclyde (5.8%), Kent (5.8%) and Warwick (5.7%) also make the top 10 best buy-to-let universities. 

Co-Founder of UniHomes, Phil Greaves commented:

“It’s no secret that the profitability of the buy-to-let sector has been hit hard by a string of legislative changes, particularly reductions on tax relief and an increase in stamp duty. With many also financially impacted due to the current pandemic, many landlords have also seen their level of rental income impacted. 

However, the good news is that despite the current landscape, demand for higher education and student accommodation remains high, as many persist with their study plans with an eye on life after the pandemic. 

As a result, the student accommodation sector has continued to provide a consistent level of demand for many landlords, allowing them to avoid any lengthy void periods. In addition, many students finance their living arrangements via a student loan and so they don’t present the financial unpredictability that many are experiencing in the regular rental market at present. 

Of course, it’s still important to research other influential factors such as the yields available to ensure your investment is as profitable as it can be.”

Top 20 Best Buy-to-let Universities Based on Current Rental Yields
UniversityLocationOutcode – main campusOutcode – average house priceOutcode – average rentOutcode – rental yield
University of SouthamptonSouthamptonSO17£226,489£1,3887.4%
University of NottinghamNottinghamNG7£175,697£1,0217.0%
Nottingham Trent UniversityNottinghamNG1£164,775£9216.7%
Newcastle UniversityNewcastle upon TyneNE1£158,862£8386.3%
University of DundeeDundeeDD1£159,748£8036.0%
Cardiff UniversityCardiffCF10£177,269£8725.9%
University of LeicesterLeicesterLE1£131,768£6485.9%
University of StrathclydeGlasgowG1£181,750£8775.8%
University of KentCanterburyCT2£303,801£1,4655.8%
University of WarwickCoventry CV4£266,580£1,2685.7%
University of BathBathBA2£392,060£1,7855.5%
University of AberdeenAberdeenAB24£124,327£5505.3%
University of LeedsLeedsLS2£159,997£6895.2%
University of ManchesterManchesterM13£231,672£9915.1%
University of LiverpoolLiverpoolL7£117,266£4895.0%
Lancaster UniversityLancasterLA1£180,343£7505.0%
University of ExeterExeterEX4£265,988£1,0684.8%
University of St AndrewsSt Andrews, FifeKY16£300,814£1,2064.8%
Arts University BournemouthBournemouthBH12£298,237£1,1734.7%
University of East Anglia UEANorwichNR4£342,051£1,3344.7%

House price, rental and yield data sourced from PropertyData

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