University Towns Offering Best Buy to Let Investments

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University towns are offering the best buy to let investments according to new research from Totally money.

The university towns of Nottingham and Liverpool particularly stood out, with both having two postcodes in the top ten for rental yields.

Nottingham’s NG1 postcode topped the list with a rental yield of 11.99 per cent, with the NG7 postcode taking fifth place with a return of 8.89 per cent.

Low property purchase costs in the two postcodes helped Nottingham to top the list, with property prices averaging £152,631 and £160,269 respectively – far below the UK average of £226,906. Plus, it has a student population of over 37,000.

Similarly, Liverpool’s L7 and L1 postcodes took second and fourth place with rental yield returns of 9.79 per cent ad 9.33 per cent respectively. In fact, Liverpool had five postcodes in the top twenty for rental yield return.

Other university towns also fared well, with Newcastle’s NE6 and NE1 postcodes taking sixth and seventh place with yields of 8.43 per cent and 8.16 per cent.

Property in the NE6 postcode is available at an average of just £118,789 which is way below the national average.

Whilst Property costs more in the NE1 postcode at an average of £161,035 it is within walking distance of both Newcastle and Northumbria universities and so enjoys high demand from student renters.

Mark Moloney from Totally Money said: ‘Year after year, there’s a constant flux of students looking for somewhere to bed down for the night, so it’s no surprise that university cities offer landlords the highest buy to let yields. 

‘Demand is high, and landlords may use this as an opportunity to drum up competition between tenants and push rental yields higher.’

Meanwhile London did not fare nearly so well as the university towns in the research, with five postcodes in the bottom ten. Highgate N6 came out worst with a rental return of just 1.93 per cent, while East Ham E6 offered the highest rental yield return in London at 4.81 per cent.

Despite high rents in the capital giving buy to let investors the highest annual property income – around £7 billion in 2017/18 which accounts for around 20 per cent of the national total – the cost of property in the capital hugely squeezes rental yields.

 

Top Buy to Let Investment Yield Postcodes

Rank

Postcode

Postcode Town

Properties for Rent

Average Monthly Rental Value

Properties for Sale

Average Asking Price

Yield

1

NG1

Nottingham

44

£1,525

169

£152,631

11.99%

2

L7

Liverpool

149

£941

79

£115,398

9.79%

3

TS1

Cleveland

185

£543

96

£68,925

9.45%

4

L1

Liverpool

116

923

404

£118,754

9.33%

5

NG7

Nottingham

240

£1,187

168

£160,269

8.89%

6

NE6

North East

540

£834

216

£118,789

8.43%

7

NE1

North East

357

£1,095

157

£161,035

8.16%

8

S2

Sheffield

238

£853

117

£125,483

8.16%

9

SS1

Southend-on-Sea

100

£2,736

207

£409,233

8.02%

10

BD1

Bradford

153

£439

130

£65,889

8.00%

11

L6

Liverpool

181

£765

123

£116,995

7.85%

12

TS3

Cleveland

38

£431

75

£67,489

7.66%

13

L5

Liverpool

48

£668

122

£104,893

7.64%

14

SR1

Sunderland

117

£567

47

£90,347

7.53%

15

HD1

Huddersfield

171

£838

61

£134,246

7.49%

16

L3

Liverpool

208

£836

817

£134,803

7.44%

17

LS6

Leeds

799

£1,483

79

£239,505

7.43%

18

M14

Manchester

433

£1,265

95

£214,848

7.07%

19

DN31

Doncaster

39

£398

51

£68,301

6.99%

20

PR1

Preston

653

£845

606

£147,076

6.89%

 

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