Study reveals student let hotspots could ease the squeeze on buy-to-let investment

TotallyMoney’s latest buy-to-let yield property investment report sees the university cities climbing the table of top performing postcode areas. And despite increasing pressure on diminishing margins, landlords could still see rental yields in excess of 12% in the best postcode area.

The TotallyMoney Buy-to-Let Yield Survey (AW17 Edition) has named Liverpool L7 as the top postcode area for rental property return on investment. A combination of lower than national average house prices and relatively high rental costs driven by high demand have contributed to the 12.63% yield. The survey looked at more than 500,000 properties in 2700 postcodes across England, Scotland and Wales, and the Merseyside powerhouse, picked up all three of the top positions.

Manchester, Nottingham, Sheffield, Glasgow, Cardiff and Plymouth, all university strongholds with large student bodies in need of affordable accommodation, also placed highly in the top 25 postcodes and delivered buy-to-let yields in excess of 7.25%.

The Interactive Buy-to-Let Yield Map is one of a number of tools developed by TotallyMoney to help landlords make smarter decisions. Along with a free credit report service, buy-to-let mortgage comparison tool and in-depth guides, the map equips prospective rental investors with the data to inform their property search.

Key Findings

  • Liverpool's L7 remains in top spot. The postcode covers City Centre, Edge Hill, Fairfield and Kensington and its proximity to two of Liverpool's three universities makes it a favourite for student lets.

  • Liverpool postcodes also dominate the top 25 buy-to-let yield table, with 2008's European Capital of Culture making up eight of the top 25 postcodes.

  • Home to the University of Plymouth, the PL4 postcode soars up the table from 15th to 4th (10.15% yield).

  • Middlesborough's TS1 postcode is home to Teeside University and makes the top five with an average yield of 10.06% and an average property asking price of £64,500.

  • With four universities and a student population of 100,000, the Manchester rental market is strong. The city boasts two of the highest yields in the study, with 8.25% in the M6 postcode and 7.98% for M14, student favourite and home to the University of Manchester's Fallowfield Campus.

  • Two Scottish postcodes makes it into the top 25 of the buy-to-let yield table: Glasgow's G3 (covering Anderston, Finnieston, Garnethill, Park, Woodlands, Yorkhill) and Aberdeen's AB11 (covering the city centre and Torry).

  • No postcodes from London or the Home Counties make the top 25 BTL yielding postcodes

  • Central London postcodes make up 8/25 of the bottom BTL yielding areas.

Explore the full Interactive Buy-To-Let Yield Map of the UK and see the average rent, property price and yield level for each postcode area:

Joe Gardiner, Head of Brand and Communications says: “Realising a decent return on a buy-to-let rental property is becoming increasingly difficult. Property prices continue to rise steadily, albeit more slowly, and rule changes have made lenders more cautious.

“Prospective landlords need to go into property investment armed with the facts: they need to be on top of their credit report, compare the market for the best buy-to-let mortgage rates and focus on property investment in areas that can give them the highest yield.

“The buy-to-let hotspots postcode map pinpoints postcodes and gives landlords a solid steer towards the opportunities that university city student lets offer.

“And our free credit report, buy-to-let mortgage comparison tool, ultimate guide to buy-to-let mortgages and in-depth guide to maximising profits from buy-to-let investment complete a suite of invaluable tools for landlords.”

About TotallyMoney

TotallyMoney provides customers with a free Credit Report and Live Score that puts them right at the centre of their credit data, helps them make smarter decisions and take control of their finances.

TotallyMoney’s unique Borrowing Power algorithm shows customers how likely they are to be offered credit by real-world lenders.

TotallyMoney is an independent credit broker, not a lender. It provides a free comparison service to customers, though they may be paid a fee by lenders. How much they get paid doesn't influence how the service works or the ranking of any credit products presented to customers.

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