August 18, 2016

Sunderland crowned top student town for landlords

London, 18 August 2016 – New research from online mortgage lender LendInvest has named Sunderland as the top postcode area for landlords letting properties to students.

In its latest Buy-to-Let Index, LendInvest looked specifically at 2016 average rental yields – the most important factor for landlords letting to students – in postcode areas with at least one of England and Wales’s top universities that feature on the latest league table compiled by the Complete University Guide (CUG).

Interactive map: details average house price, rental yield, universities and student population for each postcode area in England and Wales. Embeddable link here.

Table: embeddable table of top student postcode areas attached

Key findings

Based on figures for 2016, property investors who invest in properties in Sunderland can enjoy average rental yields of 6.50%. Sunderland is also the cheapest place to invest in in the top 20 student towns, with the average property price standing at just £90,000.

The next best area is Manchester, with an average rental yield of 6.2%. Investors here can benefit from significant demand – the city is home to three ranked universities and a student population of nearly 90,000 people. Average property prices in Manchester stand at £135,000.

Cambridge may be ranked as the nation’s top university, but Oxford offers investors a better return. The average rental yield in Oxford stands at 3.9%, compared to 3.6% in Cambridge.

Here are the top postcode areas for landlords, and the current average rental yields on offer.

BTL Table - August 2016

Christian Faes, Co-Founder and CEO of LendInvest, said: “Student towns are an excellent option for investors; there’s a steady stream of demand with each new academic year delivering prospective tenants. With A Level results out today and the year’s clearing for university places swinging into action, where’s best for student lets will be on the minds of many landlords.

“However landlords need to look beyond simply how big the local student population is. For instance, there are many thousands of students attending universities in London, yet when it comes to rental yields there are far more profitable areas to invest in than the capital.

LendInvest’s top five tips for renting to students:

  • Aim for a property which has at least three bedrooms. Students tend to rent in groups of three to five people. Having more than one bathroom will also be a big selling point.
  • Location-wise, look for properties with good access to the university campus as well as basic shops and services.
  • It’s a good idea to ask for a guarantor for each student tenant. That way, even if the student doesn’t pay the rent, you can recover it from the guarantor.
  • Consider using a joint tenancy agreement, rather than an individual agreement with each tenant. This way, if one tenant drops out or leaves, you will not miss out on rent while the room is unoccupied.
  • Some universities, like the University of Southampton, compile directories of accredited private student accommodation in the area. You will need to comply with certain standards in order to get onto these directories, but they are a great way of directly reaching suitable tenants.

–End–

Notes to editors

Data sources: Land Registry, Zoopla, Complete Universities Guide, Higher Education Statistics Agency, Department for Education

About LendInvest

LendInvest is the UK’s leading platform for property finance.

LendInvest offers short-term, development and buy-to-let mortgages to intermediaries, landlords and developers. Its proprietary technology and user experience are designed to make it simpler for both borrowers and investors to access property finance.LendInvest has lent over £3bn of short term, development and buy to let mortgages.

Its funders and investors include global institutions such as HSBC, Citigroup and NAB, and, in 2019, it was the first Fintech to securitise a portfolio of BTL mortgages. The company has reported annual profitable growth since 2015 and was named Digital Innovation Award Winner at the Sunday Times Tech Track 100 Awards, and both Specialist Lender and Buy-to-Let Lender of the Year for 2019 at the last NACFB awards.

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