Durham Offers Highest Yields for Student Property Investments

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Buy to let investors willing to let to students are reaping the rewards of high yields, with Durham the most profitable student town for buy to let landlords.

Simple Landlords Insurance has released a league table rating universities by yield. Durham claimed the top spot, offering returns of 11.5 per cent per year. Warwick followed in second place, offering yields of 10.3 per cent, followed by Manchester at 8.5 per cent.

Simple Landlords compiled the research by comparing the rental price advertised for student houses on popular roads with the estimated property values. They did this for 20 of the UK’s top universities.

Despite the clear financial benefits, just one fifth of landlords are willing to rent to students. A Simple poll of 400 landlords found that 79 per cent haven’t or wouldn’t consider renting to students. The majority preferred to play it safe, renting only to professional working tenants.

However, this is a missed opportunity with research demonstrating that student properties can command significantly higher rent than their estimated market value. Recent research from Zoopla which looked at similar properties on the same street as student homes found that the former were rented for lower than the price advertised specifically for student tenants for 17 out of 20 towns.

Director of Underwriting from Simple Landlords Insurance, Tom Cooper, said: ‘There are some great investment opportunities for the minority of landlords who are prepared to rent to the student market. And it’s not as risky a move as you might think. Often students don’t deserve their bad reputation. With university fees today’s students take their studies much more seriously, and many also work to see themselves through the semester. It’s not quite the hard-partying picture many have of student life.’

He continued: ‘In fact we’ve recently increased the discount on landlord insurance for properties let to students on the back of analysis carried out by our underwriters, which would suggest students just aren’t the reckless tenants many believe them to be. Don’t miss out on a great investment opportunity and sky high yields because of tenant type. That’s what insurance is for. Get the right cover, and inspect regularly to keep an eye on things before they can escalate.’

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