Northern university housing shows strongest rental yield

John Hewitt Jones

August 17, 2016

newcastle

Properties next to universities in Northern cities have the best performing rental yields, research by property crowdfunding platform Property Partner reveals.

Property Partner has compiled a list of 86 university towns and cities across the UK, ranked by net rental yield in each local property market.

The cities of the North East perform best, with Sunderland topping the table (6.9% net yield), alongside Middlesbrough (5.9%) and Newcastle – pictured- (4.3%).

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Birmingham ranks third, with an average sold house price of just £116,732. Although purchase costs are low, average net yield is 4.5% per year.

Parents investing for their children in Manchester could expect to earn a net income of 4.4%, following the transformation of areas including Salford and Deansgate through infrastructure projects and regeneration programmes.

In London and the South East sustained double-digit price rises have squeezed yields on buy-to-let property.

Six of the bottom-ranking universities for rental income are in the capital, with Imperial College, in Kensington and Chelsea, shown to be the lowest-yielding property area surveyed (1.3% net yield).

Dan Gandesha, Property Partner chief executive, said: “In this era of ultra-low rates and high market volatility, stable investments which provide a reliable income, and medium to long-term capital growth prospects are the holy grail.

“Property is a total returns investment, and until recently, it’s been a capital returns play. But with Brexit, the rules of the game are changing. Now our investors are increasingly focussed on the reliable income they can earn, month after month.”

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