Liverpool is still a great place to invest for landlords.
A recent analysis by Paragon Bank of buy-to-let mortgage offers in student hotspots identified Liverpool as the second-best place to invest.
Student postcodes in Liverpool achieved the second-highest yields at 8.93%, followed by Edinburgh at 8.23% and York at 8.12%.
Stoke-on-Trent was the university town with the highest rental yields.
Landlords benefiting
Landlords in Stoke, who provide accommodation to students studying at Stafford and Keele universities, achieved an average yield of 9.43%, based on offer data over the past two academic years.
The average annual rental income in the city’s student postcodes stood at £13,860, and the average student property was priced at £146,944.
Overall, Russell Group University locations performed well. The Russell Group consists of 24 world-class, research-focused universities, and 13 of these are based in the top 15 yielding university towns and cities.
Locations to invest
Property in student areas across the UK obtained an average yield of 7.04% in July 2024, up from 6.12% in the same period two years ago.
| Location | Annual rental income | Average property valuation | Yield |
| Stoke-on-Trent | £13,860 | £146,944 | 9.43% |
| Liverpool | £26,409 | £295,722 | 8.93% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| York | £39,360 | £484,958 | 8.12% |
| Coventry | £29,173 | £361,153 | 8.08% |
| Cardiff | £29,310 | £369,295 | 7.94% |
| Nottingham | £29,683 | £376,746 | 7.88% |
| Leeds | £36,996 | £470,279 | 7.87% |
| Exeter | £44,642 | £578,074 | 7.72% |
| Loughborough | £25,201 | £323,103 | 7.68% |
| Sheffield | £27,716 | £363,917 | 7.62% |
| Southampton | £28,804 | £379,383 | 7.59% |
| Durham | £34,001 | £453,263 | 7.50% |
| Bristol | £42,281 | £565,081 | 7.48% |
| Newcastle | £35,511 | £476,131 | 7.46% |
Expert comment
Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, said: “Student property remains a popular choice for portfolio landlords because they can typically achieve higher yields than standard buy-to-let property. They also benefit from parental guarantees, so arrears are typically lower.”
She added: “The stronger performing locations , based on our lending data shows that there’s a gravitation towards quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Liverpool is one of these stronger-performing locations, and there is plenty of information about investing in it.
Neil Smith, Paragon Bank Head of Surveyors, commented: “Portfolio landlords usually have in-depth knowledge of local student markets to the point where they know the prime local areas and even the favoured roads that provide a strong sustainable student rental demand.
With demand for university places expected to rise over the next few years, there will be a greater need for student accommodation.
“Some of this will be met by Purpose Built Student Accommodation, but the traditional student property provided by private landlords will remain very much part of the mix.”
