Sunderland crowned top student town for landlords

As A-Level students collect their results and look to university, Sunderland has earned top marks in the student property investment exams.

New research from online mortgage lender LendInvest has named Sunderland as the top postcode area for landlords letting properties to students.

In its latest Buy-to-Let Index, LendInvest looked at 2016 average rental yields in postcode areas with at least one of England and Wales’s top universities that feature on the latest league table compiled by the Complete University Guide (CUG). Based on figures for 2016, property investors who invest in properties in Sunderland can enjoy average rental yields of 6.5 per cent. Sunderland is also the cheapest place to invest in in the top 20 student towns, with the average property price standing at just £90,000.

The city’s ranking is backed up by similar research from Partner Partner, which ranked 86 university towns across the UK by net rental yield, finding that cities in the North East performed best, with Sunderland in the top spot (6.9 per cent), followed by Middlesbrough (5.9 per cent).

LendInvest’s runner-up is Manchester, which Property Partner ranks in fifth place. Indeed, the focus remains on regional hotspots, with Birmingham in third place for Property Partner, which highlights the opportunities surrounding Aston and Birmingham City University, where areas such as Digbeth and Eastside are more affordable and therefore able to generate higher yields.

Related: Digbeth: The New Shoreditch?

Christian Faes, Co-Founder and CEO of LendInvest, says: “Student towns are an excellent option for investors; there’s a steady stream of demand with each new academic year delivering prospective tenants. With A Level results out today and the year’s clearing for university places swinging into action, where’s best for student lets will be on the minds of many landlords.

“However landlords need to look beyond simply how big the local student population is. For instance, there are many thousands of students attending universities in London, yet when it comes to rental yields there are far more profitable areas to invest in than the capital.”

Dan Gandesha, CEO of property crowdfunding platform Property Partner, adds: “In this era of ultra low rates and high market volatility, stable investments which provide a reliable income, and medium to long-term capital growth prospects are the holy grail. Property is a total returns investment, and until recently, it’s been a capital returns play. But with Brexit, the rules of the game are changing. Now our investors are increasingly focussed on the reliable income they can earn, month after month.”