Research released this morning reveals that university cities offer some of the highest buy to let yields in the country.
The Free Credit Report company surveyed over 580,000 properties across England, Scotland, and Wales to rank postcodes by their buy to let yields.
The research showed locations with a high student population — like Nottingham, Liverpool, Manchester, Leeds, and the North East — boast some of the UK’s highest rental yields.
Nottingham has two postcodes featuring in the top five. NG1 takes first place with an average rental yield of 11.99 per cent and NG7 takes fifth place with an average yield of 8.89 per cent.
Property prices in Nottingham are also affordable, averaging £152,631 and £160,269 respectively — far below the UK average of £226,906. It has a student population of over 37,000.
Liverpool takes second place, with two postcodes in the top five, and five postcodes in the top 20. It has an approximate student population of 70,000, as well as three universities, which is thought to contribute highly to its strong yields.
Postcode L7 takes second place and has average rental yields of 9.79 per cent. L1 also performs well, taking fifth place, with average yields of 9.33 per cent.
Newcastle’s NE6 takes sixth place, with an average rental yield of 8.43 per cent. Property prices here are far below the UK average at £118,789, with Newcastle and Northumbria universities approximately 30 minutes away on public transport.
Similarly, Newcastle’s NE1 has yields of 8.16 per cent, and is within walking distance to both universities. Property prices, however, are slightly higher at £161,035, but are still below the UK average
London, by contrast, struggles.
North London in particular was a poor performer, with five postcodes in the bottom 10. Highgate in N6 was the worst postcode in the capital and third from bottom overall, with paltry yields of just 1.93 per cent.
E6 in East Ham offers the best London yields at 4.81 per cent with Stratford (E15), Plaistow (E13), Poplar (E14), and Chingford (E4) all ranking in the London top 10.
The research has been commissioned by TotallyMoney, whose head of brand and marketing communications, Mark Moloney, says: “Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.”