The University-Let League Table
This week A-level pupils get their results and University places – and many new and existing students will be going into private rented accommodation for the start of the new semester.
Students don’t have the best reputation as tenants, but we decided to dig a little deeper. We found that student-lets can actually pay off - if you pick the right city.
University league tables normally list institutions by academic performance and/or popularity. In our new league table we rate universities by yield, and St Andrews hits our top spot with the opportunity to earn up to a 12%p.a. return.
Lancaster comes in second place, with Loughborough and Birmingham taking third and fourth. All have the potential to achieve a yield of more than 10%. Exeter, Durham, Sussex and Nottingham are also good options, with yields in excess of 9.5%.
Alex Huntley, Head of Operations at Simple, explained: “We took the top universities in the country (according to the Complete Universities Guide) and examined which offered the smartest investment opportunity. We focused on house prices in the streets where students choose to live, and compared the cost of buying a property with the rent students really pay.”
St Andrews - where Prince William famously studied – came top of our league table, and is also third in the Complete University Guide, making it desirable for investors and students alike. The research looked at Largo Road, where fairly large houses cost an average of £300,000. Five students paying £150 a week each means £36,000 a year rent.
Oxford offered the lowest value of the universities covered by the study. Properties in popular student area Iffley Road change hands for c£720,000, and could net a yield of 3.33% (£2,000 a month).
The University of East Anglia in Norwich, and Cambridge, Bristol and Surrey universities all feature towards the bottom of the table.
“It goes to show that with some research, there are some great investment opportunities out there for people prepared to target the student market,” adds Alex.
“Rising educational costs means that more students have to work to support themselves, and are definitely there to learn rather than party. They often don’t deserve their bad reputation. One way to mitigate the risk is to invest in an area you know for a student you know – and we’re seeing more people with children at university choosing to invest and buy a property.”
Deborah was one such investor, and a Simple Landlords Insurance customer. With her son and daughter both medical students facing 5 years of study, she and her husband decided to buy their student houses. You can read her story here.
Alex concludes: “The real key in renting to students is to make sure you’ve got the right insurance. Look into accidental and malicious damage cover, for instance, and make sure you’re inspecting regularly so small issues don’t become bigger, more expensive problems.”
See the league table and our top tips for renting to students below or read our expert blog on renting to students.
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