Looking to invest in a buy-to-let? These university towns will make you the biggest profits

Prince William and Kate Middleton's alma mater comes top of the list

They may not have the best reputation as tenants, but renting to students can pay off big time – provided you choose the right place. With Fresher’s Weeks kicking off around the country, Simple Landlords Insurance has published a league table of the university towns offering the biggest profits to landlords. And coming out top, with honours, is St Andrews, where The Duke and Duchess of Cambridge famously studied and fell in love.

To compile the list, Simple looked at the top universities in the country according to the Complete Universities Guide. It then studied the street were students chose to live, taking the average house prices and rents in these areas. The average rental income for each was divided by the average property price, then multiplied by 100 to get the average yield.

Not only is St Andrews top of the class, it’s also listed third in the Complete University Guide, which means it’s just as good a bet for students as it is for potential landlords. The research focused on a favourite location among students, Largo Road. Popular for its large houses, a five bedroom property can cost around £300,000. Spilt that among five students paying £600 a month, and you’re looking at an annual rent of £36,000.

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Drumcarrow-road-St-Andrews

This five-bedroom, seem-detached house is on sale for offers over £315,000 with Thorntons. It’s located on Drumcarrow road, near Largo Road.

Top 5 university towns for buy to let

  1. St Andrews, 12 per cent yield
  2. Lancaster, 10.7 per cent yield
  3. Loughborough, 10.5 per cent yield
  4. Birmingham, 10.3 per cent yield
  5. = Exeter, 9.9 per cent yield
    = Durham, 9.9 per cent yield

The study did throw up a few surprises towards the bottom of the list, with Oxford and Bristol bringing in some low yields despite having two universities a piece. Houses in Oxford’s Iffley Road area – popular among students – could make you a handsome £2,000 a month in rent. However, with sale prices around the £720,000 mark, it’s tough to make big profits.

Iffley-Fields-Oxford

This Edwardian four-bedroom house in Iffely Fields, Oxford, is on the market for £750,000 with Breckon & Breckon.

Bottom 5 university towns for buy to let

  1. Oxford, 3.3 per cent yield
  2. Surrey, 3.9 per cent yield
  3. Bristol, 4 per cent yield
  4. Cambridge, 4.2 per cent yield
  5. Norwich (University of East Anglia), 4.7 per cent yield

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‘It goes to show that with some research, there are some great investment opportunities out there for people prepared to target the student market,’ says Alex Huntley, Head of Operations at Simple.

But what about potential investors nervous of renting to tearaway students? ‘Rising educational costs means that more students have to work to support themselves, and are definitely there to learn rather than party,’ says Alex. ‘They therefore often don’t deserve their bad reputation. One way to mitigate the risk is to invest in an area you know for a student you know – and we’re seeing more people with children at university choosing to invest and buy a property.’

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