Study rates university cities for rent and yields

The UK’s best universities for affordable rent and high rental yields are revealed in a new study with the cheapest rents found near Lancaster and Aberdeen universities.

Using data from PropertyData, research by flat-sharing website Ideal Flatmate, looked at the average monthly rent for the first half of the postcode of the top 50 universities.

With an average monthly rent cost of £598, Lancaster judges as being is ideal for tenants and is closely followed by the University of Aberdeen where the average rent per month is £602.

It found that the University of Lincoln is ranked at the back of the top 50 for performance at 42, it joins top 10 universities Loughborough and Durham in rounding out the best five universities for affordable rental prices for tenants.

The average monthly rent cost around Lincoln comes in at £628, followed by Loughborough at £689 per month, just narrowly ahead of fifth ranked Durham’s £693. Nottingham at £728, Leicester at £737, Swansea at £767, Dundee at £784 and Liverpool at £784, also make the top 10 for the most affordable rental prices surrounding the top 50 university campuses.

At the other end of the list is the UK’s fifth best university, Imperial College London, where the average monthly rent cost surrounding the main campus is £4,142, proving incredibly expensive for students in particular.

The London School of Economics and King’s College London are tied as two of the worst universities for tenant rental affordability around the respective campuses, with rent working out at £3,159 per month on average around both universities.

University College London and SOAS University of London are also tied with an average rental cost of £2,431, meaning the top five worst universities for tenant rental affordability are all in London.

Elsewhere, Cambridge, the UK’s top ranked university, and second placed Oxford also neighbour each other in the lists of most expensive average rental prices. Rent costs in the surrounding areas of the two universities are among the worst in the country for tenants, with the average rent price around the University of Cambridge working out at £1,491 per month, barely cheaper than the University of Oxford’s £1,495 per month.

But the research shows that high rents don’t always mean a good return and despite rental prices surrounding the campus of LSE, King’s, Imperial, SOAS and University College being some of the highest in the UK, they are five of the six worst in terms of yield.

LSE and King’s offer the joint lowest yield at 2.04%, followed by Imperial with 2.52%, while the University of Bristol joins both University College London and SOAS with yields of just 2.94%.

The study suggests that Edinburgh, Nottingham Trent, Leicester, and Dundee offer the best options in terms of rental yields for UK landlords. All four provide yield upwards of 7%, with Edinburgh on top at 7.77%, while Liverpool follows these investment hotspots with a 6.94% yield.

Leeds also makes the top 10 with rental yields at 6.8%, followed by Strathclyde at 6.64%, Northumbria at 6.58% and Newcastle also at 6.58%. Aberdeen completes the top 10 and is not only one of the most affordable for students but brings the 10th best return on a buy-to-let investment with yields at 6.22%.

‘Although some of the country’s best universities are situated in London, they prove somewhat problematic for tenants and landlords alike with high costs making it hard to rent but also minimising the return on investment for landlords,’ said Tom Gatzen, co-founder of Ideal Flatmate.

‘Leeds, Nottingham and Warwick, where such a large percentage of the population are students, tend to be reliable for landlords in terms of yield, as they offer consistent demand and short vacancy periods which provide a consistent income stream,’ he pointed out.