Student landlords look to Durham

Landlord Mortgages, the buy-to-let broker, is urging property investors to research carefully any plans to enter the student landlord sector.

In English towns and cities with large numbers of students, the average rental yield is 6.59%, which is above the average of 5.42%.

The rental yield is the percentage of a property’s price returned in annual rent, and student landlords who do not choose their areas wisely could find their yields disappointing.

According to research by Landlord Mortgages, the rental yield for a student property in Durham is around 9.12%, while in Crewe, which is the location for Manchester Metropolitan University, it is 3.4%.

The average price of a three-bedroom house in England’s university towns is £141,000 and such a property can be expected to produce an average rent of £9,290 per year.

However, a landlord buying a property in Durham will be able to pay below the average price for a three-bedroom property, which would cost in the region of £114,600.

At the same time, student rents in Durham are higher than average and in a year, such a property could produce £10,500.

The same purchase in Crewe would cost in the region of £171,000 but typically produce only £5,806 a year in rent.

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