University cities offer highest buy-to-let returns

Ryan Bembridge

June 19, 2018

University cities offer some of the highest returns on buy-to-let investments, with Liverpool in particular leading the way, TotallyMoney research has found.

Liverpool postcodes L7 and L6 have rental yields of 11.79% and 11.59%, which are close to two of Liverpool’s three universities.

Middlesbrough’s TS1 town centre postcode, home to Teeside University, has an average rental yield of 10.94%, while areas in Edinburgh and Manchester also performed well.

Joe Gardiner, head of brand and content at TotallyMoney, said: “With students flocking to university cities year after year and looking for a place to live, it’s no surprise the student market is a dependable one for landlords.

“Since so many students are looking for accommodation, landlords may use this as an opportunity to drum up competition between them.

“But, due to the tenant fee ban, changes in mortgage tax relief, and tighter buy-to-let lending criteria, rental profits are now being squeezed more than ever.

“To maximise their returns, landlords need to be savvier — and that’s where our map and mortgage comparison tool can help.”

London was one of the worst areas across Britain for buy-to-let yields, with North London faring particularly badly.

Of all the London postcodes surveyed, five North London postcodes rank in the bottom 10, with rental yields as low as 1.5%.

TotallyMoney advised landlords looking to invest in London to focus on the East of the city.

East Ham (E6), Plaistow (E13), Manor Park (E12), Chingford (E4), Stratford (E15), and Poplar (E14) all rank in the top 10 London postcodes for rental profits, yielding 4.81%, 4.52%, 4.3%, 4.11%, 4.1%, and 3.95% respectively.

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