Smaller university towns yield better results on buy-to-lets: UK A haven for landlords

The emerging landlord news UK might put a smile on many landlords’ face across the country. According to research conducted by Paragon Bank, towns and cities across the UK have seen regular increases in their yields when it comes to private buy-to-let investments, with the highest yields coming from smaller university towns. 

The list consisting of the top 10 towns was topped by Stoke-on-Trent, a city in England with a population of 248,000, out of which 15,000 were students who were there to study at popular universities in the area such as Staffordshire University and Keele University. The analysis conducted by Paragon found that these yields have increased from 5.63% in September 2020 to 6.66% in 2023, two months ago, an ode to the growth of student accommodation in UK.

When it comes to Stoke-on-Trent specifically, the average buy-to-let property costs about £145,813, with an average rental income of £13,730. Combining these two numbers reveals that landlords in Stoke achieve a rental yield of 9.42%, a positive in student accommodation news in the Staffordshire town.

Second on the list is Swansea, with an average rental yield of 9.22%. According to the latest landlord news UK, proprietors in Swansea generate rental incomes of about £18,695 after an average spending of £202,750 on buy-to-let properties.

Glasgow is the only “bigger” town making it to the top 10, whose population exceeds half a million. When it comes to student accommodation in UK, especially in Glasgow, the average buy-to-let property costs around £211,729, with the average yearly rental income coming around £17,109, which gives the landlords about an 8.08% yield.

The managing director of Paragon Bank shared his views on the report, too, “We continue to see that it is often properties found in smaller towns and cities that deliver the best returns for landlords. Despite not typically attracting the largest student populations, these locations can benefit from property that is more affordable to purchase. All this happens while having less competition from purpose-built student accommodation, with the highest concentrations of large developments usually found in major cities like London, Birmingham and Manchester.”

An overall positive, this report signifies that with higher yields every year, landlords across the UK might receive an incentive to construct more private accommodations. This inadvertently combats the rising cases of student housing crises across Europe as highlighted in recent student accommodation news.

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