Stoke-on-Trent has been named as the university city where landlords can make the highest returns on student accommodation.
Analysis by Paragon Bank has revealed the top 10 locations for landlords targeting student accommodation.
The buy-to-let mortgage provider has put the Staffordshire city in the top spot as data from the past two academic years showed that landlords with accommodation in Stoke’s student postcodes can achieve an average return of 9.43%.
Students living here typically study at the Universities of Stafford and Keele. The average annual rental income in the city’s student postcodes was £13,860, Paragon said, while the average student home cost £146,944.
But if Stoke isn’t suitable for your student buying and letting investment, there are other cities with attractive returns.
Paragon found that student postcodes in Liverpool had the second highest return at 8.93%, followed by Edinburgh at 8.23% and York at 8.12%.
Coventry, which serves Warwick University and the University of Coventry, completes the top five, with student postcodes achieving an 8.08% return.
Overall, Russell Group’s university sites performed well. The Russell Group consists of 24 world-class research-focused universities, of which 13 are located in the top 15 most profitable university cities.
Property in student postcodes in the UK returned 7.04% in July 2024, a figure up from 6.12% in the same period two years ago.
Louisa Sedgwick, mortgage director at Paragon Bank, said: “Student properties remain a popular choice for portfolio landlords as they can typically achieve higher returns than standard buy-to-let properties. They also benefit from parental guarantees, so payment arrears tend to be lower.”
She added: “The stronger performing locations based on our credit data show a preference for quality universities, with 13 of the top 15 locations boasting a Russell Group institution.”
Top 10 college towns for landlords
(Source: Paragonbank)
| Location | Annual rental income | Average property valuation | Yield |
| Stoke-on-Trent | £13,860 | £146,944 | 9.43% |
| Liverpool | £26,409 | £295,722 | 8.93% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| York | £39,360 | £484,958 | 8.12% |
| Coventry | £29,173 | £361,153 | 8.08% |
| Cardiff | £29,310 | £369,295 | 7.94% |
| Nottingham | £29,683 | £376,746 | 7.88% |
| Leeds | £36,996 | £470,279 | 7.87% |
| Exeter | £44,642 | £578,074 | 7.72% |
| Loughborough | £25,201 | £328,103 | 7.68% |
| Sheffield | £27,716 | £363,917 | 7.62% |
| Southampton | £28,804 | £379,383 | 7.59% |
| Durham | £34,001 | £453,263 | 7.50% |
| Bristol | £42,281 | £565,081 | 7.48% |
| Newcastle | £35,511 | £476,131 | 7.46% |