Student rentals could combat impact of increase in tax
Ever since new taxes and regulations came into play, buy to let landlords have been expressing concerns about how they were facing dwindling profits and reduced yields. Some people were advising against buy to let investments altogether, saying that it was a bad time to enter the market. But as is always the case, early calls of calamity have been premature.
As it transpires, buy to let landlords are now realising that better yields are available in UK towns and cities with higher student populations. University towns and cities like Manchester, Liverpool and Norwich – where property prices are more affordable – can offer rental yields up to seven times more than in London, according to a new study by Totally Money.
A number of post codes near to Liverpool’s main universities have been shown to be hotspots for property investment yields. Average rents in these postcodes were £1,162 and £1,046, whereas house prices were £118,225 and £109,940, respectively.
The study seemed to show that the more expensive the house, the lower the likely yield. The 25 lowest yielding areas have average house prices of more than £300,000. Jeremy Robinson, managing director of rental guarantor firm Housing Hand, said: ‘Landlords and letting agents that let to UK and international students know they are getting some of the best yields in the country. Students today want high-end accommodation and are prepared a premium price for en suites, plasma TVs, premium white goods, superfast broadband and security.’
He went on to explain: ’Research shows that outside London, students are paying an average of £568 rent per month. We know that students will pay more for shared accommodation that is close to a university’.
With international students having a much larger budget for accommodation, especially those coming from the UAE and China, combined with the low value of sterling, it means that yields in this market are good.
Here in Norwich, with its relatively low house prices and large student population, it could be a very good place to invest in the student market. It might not quite have the yields of a Liverpool yet but it also represents perhaps a better long term investment, and the proximity to London also helps.
If you would like to know more about the student market, then get in touch with a member of our team to discuss your options, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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