New research by online estate agent, eMoov.co.uk, takes a look at the top 50 universities in the UK as ranked by the Guardian and which provide the most affordable options for those looking to get on the student buy-to-let ladder (with the inclusion of the additional stamp duty cost for a rental property).
eMoov also looked at which University towns make the best investment in the long term based on the rental yield of a property in that area. Finally, eMoov have highlighted the best four options that appear in both top 10 tables, offering an affordable price tag and high rental yield.
Top 10 Most Affordable
Across the top 50, the average house price is a steep £318,267 largely due to the London based universities with the average stamp duty cost hitting £17,476.
The top university town for an affordable foot on the student buy-to-let ladder is Durham with an average house price of just £102,347 and a stamp duty cost of £3,070 totalling just £105,418.
When taking the additional stamp duty cost into account, the rest of the top 10 looks like this.
Dundee University (£122,729), Queen’s University, Belfast (£123,961), Glasgow University (£127,317), Nottingham University(£137,376), Swansea University (£144,888), Keele University (£150,198), Lancaster University (£153,630), Lancaster University (£153,630), Sheffield University (£157,045) and Derby University (£157,253).
Top 10 Largest Rental Yields
For those more worried about the long term return rather than the initial cost of getting on the ladder, the average rental yield across the top 50 university towns is 5.51%, with the average annual rent reaching £15,822.
Nottingham University climbs the ranks to number one as the best buy-to-let option, with an average house price of £133,215 and an annual average rent of £11,400, Nottingham offers a rental yield of 8.56%.
Again, the rest of the top 10 looks as follows.
Leeds University (7.80%), Queen’s Belfast (7.50%), Coventry University (7.43%), Glasgow University (7.31%), Manchester University (7.16%), Swansea University (7.08%), Birmingham University (6.82%), Aston University (6.82%) and Portsmouth University (6.59%).
The Best of Both Worlds
Based on both above criteria, the best investment options for both an affordable university buy-to-let property, with the addition of a high rental yield, are Nottingham University, Queen’s Belfast, Glasgow University and Swansea University with all four appearing in both top 10 tables.
Russell Quirk, founder and CEO of eMoov.co.uk, commented: “Despite the buy-to-let market receiving a bit of a kicking over the last year, it still remains a very lucrative business and one that is only marginally soured by the additional 3% in stamp duty tax.
The presence of a top university nearby is one way of ensuring a consistent stream of income to sweeten the recent changes in buy-to-let dis-incentivization. What’s more, the UK has an abundance of top universities spread far and wide and so it provides a whole host of more affordable options for getting on the buy-to-let ladder, other than the usual go to option of an over inflated London market.
With the likes of Durham, Nottingham and more providing much lower costs for that first foot on the ladder but equally as appealing rental yields, a buy-to-let in a university town can be a very good investment indeed.”