Only one in five landlords are willing to rent to students. However, student buy-to-lets offer some of the highest yields on the market, generating more than similar properties in the same area by an average of a third. A steady year-round supply of students, a large number of tenants sharing accommodation and high demand for quality rentals ensures that returns remain high for landlords. So where's a good place to invest your money? Here's our round-up of the top 20 university towns and cities to invest in, with rental yield figures from Simple Landlords Insurance and rent/house price figures from rightmove.
Not only does Oxford have one of the oldest universities in the world, there's also Oxford Brookes to bolster the student population. The world-famous Oxford University has seen some of the greatest writers, politicians and scientists through its doors. It ranks second highest in the UK university league tables, however, it only just sneaks into the top 20 best locations for student buy-to-lets, with a yield of 2.78%. Semi-detached properties on average cost £497,484 and the 11,456 students who move into private accommodation in their second year pay rent of around £970-£1,433 per month.
READ MORE: Your 12-point checklist for choosing a buy-to-let property
This northern town has three institutions: University of Leeds, Leeds Beckett University and the smaller Leeds Trinity University. Student buy-to-let properties in Leeds generate an average return of 4.17%. In the last year, the average selling price for properties in the city centre was £164,617, the majority of which were semi-detached – up 10% from the previous year. However, there are 23,256 potential students in Leeds looking for accommodation when they move out into private residences after their first year.
The 18th most profitable town for student buy-to-lets is home to the number one ranking university in the world, University of Cambridge, as well as Anglia Ruskin, a former art school and polytechnic. If you are looking to buy in the area, house prices average at £516,018 and yield on average 4.28%. This is because most students stay in halls of residence, costing £105-£185 per week, for longer than first year. This year University of Cambridge launched the Stormzy Scholarship to fund two of their 11,969 students through their entire degree.
With over 23 major universities in London, students flock to the capital's renowned education institutions from around the world. London School of Economics (4th in the league tables), Imperial College London (5th), University College London (7th) and King’s College London (21st) are all popular destinations for international students. The notoriously expensive property market could be a barrier to buying: house prices average at £747,645, consisting of mostly flats. A student buy-to-let will yield around 4.53%, with students willing to pay between £140 and £524 a week.
The University of Exeter has a population of 13,340 students. There are 5,000 places in university accommodation, where costs range from £68-£249 a week. The majority of the rest of the students will fall into private accommodation so there's a constant demand for decent private rental housing. If you're looking to buy in Exeter, your average property will set you back around £278,533. Only slightly more than London, student buy-to-lets in Exeter yield 4.56% on average.
The historic University of Edinburgh, established in 1582, has a population of 18,492 students who live in both private and university accommodation. There are also two other universities: Heriot-Watt University and Edinburgh Napier University, providing an abundance of scholars needing to be homed. House prices in the Scottish city have gone up 6% from last year, with an average price of £347,334. However, students expect to pay around £380-£750 per month so a student buy-to-let could yield an average of 5.24%.
The University of East Anglia has the 14th most profitable student town for buy-to-let properties, with an average return of 5.33%. The UEA campus is set in 300 acres of parkland, two miles from Norwich city centre, where Norwich University of the Arts students also tend to reside. Many of the 10,510 UEA students live on campus, paying £3,210 to £5,655 per year. The rest look to the city, where the average terrace costs £213,803.
Located in an area famous for its Roman Baths and Georgian architecture, there are two higher education institutions feeding the city with students, Bath Spa University and the University of Bath. Letting to students could offer a gain of 5.52%, with the average sale price of a terrace house coming in at £463,806. With a population of 9,638, the university only offers accommodation to around 3,000 people who fork out £95-£125 per week.
The University of Surrey could turn a nice profit for buy-to-let landlords with an average yield of 5.61%. Out of 9,016 students, only those who put Surrey down as their first choice are guaranteed accommodation in their first year, ranging from £69 to £165 per week. The rest look to rent privately in Guildford, joined by students of the nearby University of Law, where the average semi-detached house costs £511,853 - an increase of 6% on the year before.
The University of Birmingham, established in 1900, has a student population of 17,844. A busy student city, Birmingham is also home to Birmingham City University, Aston University and Newman University. Student buy-to-lets in Birmingham generate a yield of 5.63%. Birmingham's halls of residence cost £190-£252 per week, but the majority of students move into private accommodation following their first year. A property in Birmingham city centre will set you back an average of £191,659.
A place at the University of St Andrews, ranked a prestigious 3rd in the league tables and the place where Prince William famously met Kate Middleton, is highly sought after by students. Its population of 6,628 students pay £3,840-£8,011 annually for a scarce number of university halls. With private housing in demand and standards of living unusually high for this well-to-do uni, a student rental could offer a healthy return of 6.77%. Get yourself on the property ladder for an average of £373,880, up 23% since last year.
READ MORE: 20 buy-to-let hot spots expecting the greatest price rises
A hugely popular university hotspot in the west of England, Bristol has academic buildings spread all around the city centre. With 13,099 current students, Bristol University and the University of the West of England ensure a steady flow of new students looking for accommodation during their courses. A buy-to-let in this city could generate a generous 6.88%. Some students stay in university accommodation, paying between £3,136.14 – £6,497.40 annually. Others seek private residence in a terraced property, which you can buy for around £290,175.
Lancaster University sits in 250 acres of rural parkland, three miles south of Lancaster. It is a campus-based university where some of the 8,834 students reside in halls of residence, paying between £85.40-£179.80 per week. After their first year, students seek private accommodation in nearby Lancaster, where landlords make an average yield of 7.38% on terrace properties which typically sell for £146,036.
The University of Nottingham is the 7th largest in England, with 22,449 students, yet it shares its town with neighbouring Nottingham Trent University. Ranked 18th in the league tables, an abundance of students and the university's international reputation means a buy-to-let property in Nottingham could offer an average gain of 7.38%. You can bag yourself a semi-detached property for around £173,746, with average house costs up 3% from last year.
Loughborough University has a population of 11,706. University halls cost £3,416 - £6,792 annually, but students tend to venture out into private accommodation after the first year. You can expect an average return of 8.11% if you invest in a rental property here, with a typical house setting you back £194,317.
Brighton is home to not only the respected University of Sussex, 19th in the league tables, but also the University of Brighton. Student accommodation at UoS costs between £86-£148 per week. However, the institution's 9,178 students will be likely to move into private accommodation following first year, which could deliver landlords a yield of 8.19% on their investment. A flat in Brighton sells for an average of £292,328.
Established in 1963, the University of York has eight colleges, 10,941 students and holds a rank of 20th in the league tables making it one of the best places to study in the North. Halls of residence cost between £106-£173 per week, while privately owned housing in the area comes in at £70-£85 per week. York also plays host to York St John University, meaning a buy-to-let property could yield an impressive 8.24% return, with semi-detached homes on the market for around £246,972.
Located in the northwest of England, Manchester is the third most visited city in the UK and home to three great educational establishments. They are Manchester Metropolitan University, Victoria University of Manchester and the well-respected University of Manchester. The latter has a student population of 26,864, who are willing to pay £95 to £145 per week for university self-catered accommodation and look to move out after first year. A buy-to-let property has an average return of 8.48%, with flats making up the majority of house sales in the city this year. An average apartment will set you back £172,631.
The University of Warwick is located three miles from Coventry in the north of England. With a population of 12,684, students pay between £81 and £167 per week for halls. After their first year they opt to move out to the nearby towns of Leamington, Warwick and Coventry, joining students from Coventry University, making the average buy-to-let property in Warwick generate an incredible yield of 10.25%. The majority of property sales during the last year were terraced homes, selling for around £285,688.
And taking the top spot is one of the best universities in the UK, ranked 6th in the Complete University Guide, with an impressive buy-to-let investment return of 11.53%. Durham University has around 11,719 students, with people from all over the world drawn to this northeast city. Private rental costs for second-year students come in at £85-£90 a week and you can pick up a semi-detached house here for around £148,873.
READ MORE: A landlord's guide to renting to students