Rental yields for student lets is topping 10 per cent in the best performing university towns.

A survey carried out by the Property Investor Show (19-21 Sept, Excel, London) suggests that Nottingham is the best student town to buy rental property.
It has low property prices and higher rents that give an average 10.19 per cent yield.
Durham follows close behind with average rental yields of 9.23%.

Yields outstrip average

The worst performing towns are Warwick and Crewe with rental yields of 3.92 per cent.
The average yield of 7.9% for the top ten university towns outstrips the UK average of 6.4% for other buy-to-let properties, as house prices drop by 17% and rents increase by 8% since this time last year.
Manchester, Hull and Bangor complete the top five most profitable towns. Landlords who let out student accommodation in these towns achieve an annual rental yield in excess of 7%.
The research was carried out comparing the average rent and the average house price for the University town, based on a three bedroom house being rented to three students.

More demand for student lets

Nick Clark, Managing Director of the Property Investor Show, says: "Investors may think that they are buying into a weak market, but as this research shows rental yields are on the increase and buy-to-let investors have a great opportunity to capitalise on the increasing demand for student accommodation, whilst taking advantage of lower house prices.
"There will always be a sustained demand for properties which will produce a far greater annual rental yield than the average buy-to let property. In fact, it could be as much as six to seven per cent more.
"With house prices falling, now is a great time for cash rich investors to snap up a deal."

Look to the long term

Mr Clark advised investors to look at student accommodation as a long term investment based on high rental returns rather than capital growth.
Sq Ft would also urge landlords to do their homework when buying in university towns.
The Government has announced that it wants to see more purpose built student accommodation.
Check with local authorities or universities to assess whether there are plans afoot for such developments, which could lead to an over supply in the student lettings market.