Stoke-on-Trent has been revealed as having the highest yielding student properties for landlords, in a recent study by Paragon Bank.
The bank’s own lending data ranked the 15 top student accommodation locations in order of the yield they generate landlords.
Student accommodation in Stoke, for those studying at Stafford and Keele universities, has an average yield of 9.43% — this is based on rental income of £13,860 and property valuation £146,944, both averages for the area, respectively.
However, though Stoke student accommodation generates a higher yield than in other areas, both the annual rental income and average property valuation are lower than all the other locations ranked.
The next highest yield, at 8.93%, was found in Liverpool where the average rental income and average property valuation are £26,409 and £295,722, respectively.
Edinburgh was third, with a rental income of 8.23%. The average rental income and average property valuation in the Scottish capital are £32,789 and £398,320, respectively.
The research found that Russell Group university locations perform well, with 13 out of the 15 locations analysed hosting a Russell Group university.
Overall, property in student postcodes across the UK achieved a yield of 7.04% in July 2024 — this figure had risen from 6.12% in the same period in 2022.
Reflecting on these findings, Neil Smith, head of surveyors at Paragon Bank, said the data highlighted the promise of student accommodation in landlord portfolios.
“Portfolio landlords usually have in-depth knowledge of local student markets to the point where they know the prime local areas and even the favoured roads that provide a strong sustainable student rental demand,” said Neil.
“With demand for university places forecast to rise over the next few years, there will be greater need for student accommodation.
“Some of this will be met by PBSA, but the traditional student property provided by private landlords will remain very much part of the mix.”
Out of 15 locations analysed, 10 of these yielded below 8%.
The lowest was 7.46%, from Newcastle, where the average rental income was £35,511 and the average property valuation was £476,131.
The highest average rental income and highest average property valuation were both found in Exeter, at £44,642 and £578,074, respectively.
