Landlords in Stoke-on-Trent typically achieve annual yields of 9.43%, making it the most profitable area to be a buy-to-let landlord.
Average house prices come to just under £147,000 in Stoke, while rental incomes in the city come to £13,900.
Students studying at Stafford and Keele universities mean there’s strong tenant demand.
Student postcodes in Liverpool achieved the second highest yields at 8.93%, followed by Edinburgh with yields of 8.23%.
Louisa Sedgwick, Paragon Bank managing director of mortgages, said: “Student property remains a popular choice for portfolio landlords because they can typically achieve higher yields than standard buy-to-let property. They also benefit from parental guarantees, so arrears are typically lower.”
She added: “The stronger performing locations based on our lending data shows that there’s a gravitation towards quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Russell Group university locations performed well. The Russell Group consists of 24 research-focused universities and, of this group, 13 are based in the top 15 yielding university towns and cities.
Property in student postcodes across the UK achieved a yield of 7.04% in July 2024, a figure that has risen from 6.12% in the same period two years ago.
Neil Smith, Paragon Bank head of surveyors, said: “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.
“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 Purpose Built Student Accommodation, but the traditional student property provided by private landlords will remain very much part of the mix.”
