Thanks to tax changes implemented by the government in a bid to dampen down the buy to let market, many smaller landlords have been selling up and leaving the sector. There is now new evidence that it isn’t all doom and gloom. Recent research suggests that student lets perform well in popular student towns and cities where properties are cheap to buy. A study has found that rental yields in Middlesbrough and Liverpool are seven times higher than in London.
Liverpool #1 for Student Landlords
If a landlord bought an investment property in LY7 and LY8, which are close to Liverpool’s three universities, he could expect a rental yield of nearly 12%. The TS1 postcode in Middlesbrough is equally as lucrative, coming in at 11%. M14 postcodes in Manchester offer rental yields of 10% and EH8 in Edinburgh 11%.
Where Liverpool and Middlesbrough score highly is that property prices are cheap, which makes them more affordable for landlords.
London rents are very high, but property prices are correspondingly high, so many landlords can’t afford to invest in suitable properties. When you factor in the 3% stamp duty surcharge, the cost of buying property in places like London is amplified.
Students make Great Tenants
The student let market is attractive for other reasons too. Students are dependable tenants. They typically pay their rent upfront, so there is little danger of rent arrears. The hard part is finding a lender willing to offer landlords a mortgage, as many won’t consider properties with student tenants.
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