BTL Student Lets

Student lets is a popular area of the BTL business, although it's not without risks.

Properties in student areas can be easy to let out, and there's the potential for capital growth. On the downside, it's a competitive business with many potential gotchas.

Highest Yielding University Postcodes

No. Area Local University No. of Bedrooms Prices From Average Rents Average Yield
1 TS1 Teesside University 3 £54,950 £531 PCM 9.5%
2 CV1 Coventry University 2 £110,000 £1,082 PCM 9.2%
3 TS1 Teesside University 2 £44,950 £405 PCM 9.2%
4 SR1 University of Sunderland 1 £30,000 £393 PCM 8.3%
5 PA1 University of the West of Scotland 2 £46,750 £478 PCM 8.1%
6 BL3 University of Bolton 2 £56,950 £486 PCM 7.6%
7 PR1 University of Central Lancashire 2 £62,500 £584 PCM 7.6%
8 LE1 University of Leicester 1 £68,000 £536 PCM 7.4%
9 NG1 Nottingham Trent University 1 £70,000 £577 PCM 7.2%
10 SR1 University of Sunderland 2 £64,950 £545 PCM 7.2%
11 LE1 University of Leicester 2 £98,000 £758 PCM 7.2%
12 S1 Sheffield Hallam University 1 £85,000 £600 PCM 7.0%
13 G1 University of Strathclyde 2 £130,000 £942 PCM 6.9%
14 HU6 The University of Hull 2 £65,000 £490 PCM 6.9%
15 M5 University of Salford 2 £85,000 £775 PCM 6.9%
16 EH11 Edinburgh Napier University 2 £105,000 £856 PCM 6.8%
17 G4 Glasgow Caledonian University 1 £84,995 £628 PCM 6.8%
18 CF10 Cardiff University 2 £139,950 £1,002 PCM 6.7%
19 G4 Glasgow Caledonian University 2 £130,000 £897 PCM 6.7%
20 S1 Sheffield Hallam University 2 £119,950 £841 PCM 6.7%
21 NG7 The University of Nottingham 3 £89,950 £991 PCM 6.7%
22 NG1 Nottingham Trent University 2 £99,950 £826 PCM 6.4%
23 CF37 University of South Wales 3 £78,950 £658 PCM 6.3%
24 L3 Liverpool John Moores University 2 £124,950 £892 PCM 6.3%
25 EH8 The University of Edinburgh 2 £145,000 £937 PCM 6.2%
26 CF10 Cardiff University 1 £104,995 £689 PCM 6.1%
27 CV4 The University of Warwick 2 £110,000 £673 PCM 6.1%
28 NE1 Newcastle University 2 £143,000 £938 PCM 6.1%
29 HU6 The University of Hull 3 £84,950 £527 PCM 5.9%
30 WV1 University of Wolverhampton 3 £88,000 £570 PCM 5.9%
31 M15 Manchester Metropolitan University 2 £144,000 £913 PCM 5.9%
32 EH14 Heriot-Watt University 2 £130,000 £809 PCM 5.8%
33 G1 University of Strathclyde 1 £99,000 £614 PCM 5.8%
34 LA1 Lancaster University 2 £100,000 £598 PCM 5.8%
35 SO14 Southampton Solent University 2 £155,000 £992 PCM 5.8%
36 SY23 Aberystwyth University 3 £149,950 £995 PCM 5.8%
37 G12 University of Glasgow 2 £128,000 £946 PCM 5.7%
38 G3 The Glasgow School of Art 2 £110,000 £874 PCM 5.6%
39 LL11 Glyndwr University 2 £66,500 £501 PCM 5.6%
40 BA2 University of Bath 3 £235,000 £1,467 PCM 5.5%
41 CH1 University of Chester 3 £109,950 £768 PCM 5.5%
42 SO14 Southampton Solent University 1 £125,000 £665 PCM 5.5%
43 S10 The University of Sheffield 3 £175,000 £1,046 PCM 5.5%
44 AB10 Robert Gordon University 1 £74,000 £493 PCM 5.4%
45 EX4 University of Exeter 2 £140,000 £815 PCM 5.4%
46 LS2 University of Leeds 2 £115,000 £758 PCM 5.4%
47 LS2 University of Leeds 1 £56,995 £504 PCM 5.3%
48 LS1 Leeds Metropolitan University 2 £139,950 £843 PCM 5.3%

Considerations When Buying in Student Towns

Smaller towns and cities with Universities in them can have a dire shortage of rental properties. Places I've lived like Exeter (EX4) and Chichester (PO19) spring to mind. Both are popular places in their own right, but a large student population significantly increases the demand for rental property. The downside with these places is that property prices are high and it will be hard to find bargains and above market yields.

If you're intending to let a house to several students be sure to check the rules regarding Houses in Multiple Occupation (HMO's). The rules vary from council to council. However, the baseline is that a property will be an HMO if it has 3 or more storeys (including habitable attic rooms or basements), has shared kitchen/bathroom facilities and three or more households live there. The rules are more onerous if the landlord is not resident in the property.

As well as HMO rules, many Universities will forbid advertising of rental properties through University accommodation services if there is not a basic level of accommodation quality. Universities also often inspect rental properties offered for rent to their students.

High fees and youth unemployment are putting increasing numbers of British teenagers off going to University. However, this has been compensated to some extent by increasing numbers of overseas students wanting to study at British Universities. Overseas students can be very wealthy and will pay over the odds for student lettings in the private sector. The key consideration when letting to wealthy Chinese or other foreign students is that your property needs to offer a higher standard of furnishing than the on campus accommodation. But it also needs to be close to campus - ideally within walking distance.

A word of warning though... With student lettings you are putting your investment future in the hands of others. I did my first degree at Wye College which was based in the pretty Kent village of Wye (TN25). However, a few years later the College closed down and all the students moved away. It's still a sought after area for properties, but it no longer has the huge demand for property generated by 800+ staff and students.

Also be aware that a lot of big investors are building entire blocks of student accommodation in many cities. Universities sometimes build this accommodation themselves. This accommodation is often more expensive to rent than a room in a shared house, but it is normally much closer to a student's place of study, as well as offering good security and services such as cleaning.

University Towns

Featured Area W1B

Rental yield around 2.6% for a 3 Bedroom property.

Click here for more data about W1B.

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