Buy to Let
Landlords achieve higher yields from renting to students
By Kate O’Raghallaigh Landlords letting their properties out to students achieve rental yields that are, on average 25% higher than those let out to non-students, research has shown.
The rental yield of a property represents the annual amount of rent received by the landlord, expressed as a percentage of the property’s purchase price.
Nigel Terrington, chief executive of Paragon Mortgages, said: “Strong tenant demand in the student market is driving yields in that sector. If landlords select the right type of property in the right location, the returns from the student market can be extremely healthy.”
Landlords, whose properties include those rented to students, generate an average rental yield of 8.6%, whereas those who don’t rent to students generate 5.6%. In cases where student property accounts for more than half of a landlord’s portfolio, the average rental yield rose to 8.6%.
In addition, landlords owning student properties have little trouble filling them each academic year, Terrington said: “Most student landlords will have let their property for the following academic year by early spring due to strong level of tenant demand and the competition between students for the better quality properties is fierce.”
Students currently account for 12% of lettings in the buy-to-let market.
For more information and advice on renting to students, visit our Student Lets & HMO’s page.