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The Best Student Property Locations for Investment Revealed

We take a look at all of the UK student towns to see which is giving the best yield and average asking price. Whilst reviewing the tops cities enrolment numbers for last year and where our overseas students are coming from.

Kerry Shaw | 8th July 2019

Vita Student

Best Student Locations - EnrolmentIn the UK students and property investors are a natural pairing. Investors interested in commercial property can focus on purpose-built student accommodation while those interested in residential buy-to-let can focus on areas popular with students.

In general, areas which are good for one type of investment are also good for the other (for exactly the same reasons). This then raises the question of which parts of the UK are the best places to invest in student property.

The Midlands and North offer the best returns

That subtitle is unlikely to come as a surprise to many people, but what may come as a surprise are the cities which gave the absolute best results, according to data from oneandonlypro.com. 

Top 20 highest yielding towns

RankPostcodePostcode TownAverage Monthly Rental ValueAverage Asking PriceYield
1 NG1 Nottingham £1,525 £152,631 11.99%
2 L7 Liverpool £941 £115,398 9.79%
3 TS1 Cleveland £543 £68,925 9.45%
4 L1 Liverpool £923 £118,754 9.33%
5 NG7 Nottingham £1,187 £160,269 8.89%
6 NE6 North East  £834 £118,789 8.43%
7 NE1 North East £1,095 £161,035 8.16%
8 S2 Sheffield £853 £125,483 8.16%
9 SS1 Soutend-on-Sea £2,736 £409,233 8.02%
10 BD1 Bradford £439 £65,889 8.00%
11 L6 Liverpool £765 £116,995 7.85%
12 TS3 Cleveland £431 £67,489 7.66%
13 L5 Liverpool £668 £104,893 7.64%
14 SR1 Sunderland £567 £90,347 7.53%
15 HD1 Huddersfield £838 £134,246 7.49%
16 L3 Liverpool £836 £134,803 7.44%
17 LS6 Leeds £1,483 £239,505 7.43%
18 M14 Manchester £1,265 £214,848 7.07%
19 DN31 Doncaster £398 £68,301 6.99%
20 PR1 Preston £845 £147,076 6.89%

Source: TotalMoney

The top-performing city in the UK was Newcastle, followed by NottinghamLeedsSheffield and Manchester. The reason why Newcastle performed so well is because it has remained largely overlooked by property investors even though its standing as a university city should really generate much more buzz than is currently the case.

Similar comments apply to Nottingham and Leeds, albeit to a lesser extent, with Sheffield and Manchester being much more prominent amongst the property-investment community although still very affordable compared to both London and the “big six” university locations.

The rankings from oneandonlypro.com are based on more than just pure yield, although obviously, that is an important factor, they also incorporate an analysis of the area’s future prospects.

In other words, they aim to identify areas which offer not just good returns now, but also good prospects going forward into the future.

Best Student Locations - DemandAncient institutions offer crumbling returns

While the UK’s “big six” universities continue to attract young people with their combination of ancient charm and modern teaching, they aren’t necessarily such good news for property investors.

Oxford, Cambridge and St Andrews are all priced well above what you would expect for similar towns without the prestige of “Ivy League” universities and this takes its toll on yields.

Edinburgh and Glasgow are major cities and priced accordingly with Edinburgh commanding a particular premium as being home to the Scottish parliament.

Aberdeen has an “up-and-down” market and may be worth looking at during downturns, but even then, while prices may stagnate or fall, they may still not be particularly affordable precisely because Aberdeen still has the university.

London always carries a premium

While the universities in London are outside the hallowed ranks of the big six, they still long held a lot of appeal for both domestic and international students. It is, however, questionable how London’s universities will fare going forward.

On the one hand, their academic standards are still high and their degrees still confer real prestige. On the other hand, the capital is far more expensive than other cities with similar attractions (both academic and lifestyle).

This could lead to increasing numbers of students opting to head northwards for a high-quality degree at a much lower overall price. Given the cost of London property and the corresponding squeeze on yields, investors might wish to look for student property which could also appeal to young professionals who constitute a large part of the London rental market.

If you would like to discuss any property investment opportunities or are looking to sell your investment, feel free to call us on +44 (0) 161 337 3890 or email us on enquiries@pureinvestor.co.uk 

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