Student Housing Investment: Top Locations for 2021/2022

Paragon Bank recently researched the top locations for student housing investment. The results indicate that student property owners with rentals in smaller university towns or cities yield the most profitable returns on average.

This study might be indispensable for you if you’re a student property owner desiring to identify which areas across the country can generate the highest rental yields.

Towns and Cities with Higher Potential Yields

Swansea clutches the top spot as the UK’s best student housing investment location with the highest average yield of 9.56%. Hull was close behind with an achieved average return of 8.68% per annum.

Comparisons between the student populations, the number of universities in a town or city and the best yields enabled Paragon Bank to reveal more information about student property locations.

It’s Not All About Population

One of the main findings was that the most profitable returns are not consistently found in cities with a high population of students. Seven out of the 10 top locations only have one major higher education institution where the total population of students were less than 25,000. Liverpool, Coventry, and Leeds were the only 3 out of 10 locations with more than one university.

Comparison to Non-Student Let Properties

Investors achieve higher yields with student housing investment, compared to those let out to non-students in the same town or city. Student property can be like a normal buy-to-let, where a group of friend’s co-habit a whole property or a student HMO where students rent individual rooms. The property falls under the HMO category if at least three tenants live there, forming one household and sharing bathroom or kitchen facilities. Investors can expect to obtain a four-bed HMO for students and professionals, fully refurbished and furnished and tenanted for the coming year, for less than £175,000 in Liverpool.

Investing in student HMO accommodation presents a long-term investment opportunity, as the property is increasingly likely to be in constant demand throughout the calendar year.

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