The student towns where buy-to-let returns are as high as 10pc
Edinburgh's main university buildings Credit: Derek Blair
By Richard Dyson
Yields of more than 10pc are still obtainable from buying properties to let to students, according to new analysis, but the best returns are restricted to a small number of university towns based mainly in the north.
Top of the list in yield terms is Sunderland, where low house prices (an average £65,200) couple with moderate average rents to produce a yield of 10.6pc.
This is approximately double the yield of Southampton, for example, where a higher £212,900 average price makes the rental return less attractive by comparison.
The analysis was undertaken by property crowdfunding firm Property Partner.
Buy-to-let investors' interest in the student market peaks at this time of year as student populations move through the housing system, with many leaving their halls of residence and moving into private rented accommodation with friends.
High property prices in southern university centres of London, Brighton, Reading and Oxford make these cities less attractive to investors as yields have been forced down.
This comes at a time when high yields are an important way for private landlords to beat higher taxes.
Stamp duty was raised for second property purchases on April 1, lifting the upfront costs for buy-to-let investors.