When venturing into student lettings sector, there are a range of contributing factors that one must consider. The balancing act of trying to identify the next trend for student towns can be daunting and arduous. From our assessment of market figures and trends as well as student statistics, we have picked three student towns that have caught our eye in offering good returns on investment on top of having good long-term potential for landlords.
Our High Yield Performers:
- Manchester offers a resounding average of 8.48% return on investment per annum.
- Birmingham registers an average of 5.63% return on investment per annum.
- Edinburgh has the lowest of the three cities selected with 5.24% return on investment per annum.
By looking at the bigger picture, it becomes clear which student towns are on the rise in the UK:
- Manchester is a net importer of students. This influx of external students means renting is the most popular choice of living, whereas cities like London who are net importers of students indirectly encourages students to live at home whilst studying. Manchester ranks third highest in retention rates of life after university in the UK, just behind London and Edinburgh.
- Birmingham is home to five universities. When combined with the steady growth of university enrolment rates since 2012, this creates a real sense of excitement of the future for the city.
- Edinburgh currently has increased to nearly 500,000 private properties rented out, which is a large growth in comparison to 330,000 properties in 2016. However, there is a clear indication of demand outstripping supply as rent prices have increased steadily since 2012 with the steepest annual growth recorded at 5.5% per annum. Recognising trends like this in conjunction with what the city has to offer is extremely important, as it can be an influential factor to persuade to enrol with one of Edinburgh’s universities.
Institution and Investment:
Institutions are the backbone of any city, be it educational to entertainment, they play huge roles influencing student’s extra-curricular wants and needs when deciding which university to enrol in.
- Manchester was ranked highest outside of London for Foreign Direct Investment projects in 2018. The region has been a strong performer for the past five years, closing the economic gap led by the south. Manchester has the potential of an average growth rate of 202% per year between 2015-2035, with GVA and job creation continuing to increase.
- Birmingham attracted the largest amount of Foreign Direct Investment outside of London. Growth rates of 1.12% for population ranks highly. The borough is made up by 40% of the population demographic being below 25, a huge indication to invest into student lets. It’s clear to see why Birmingham is attracting students, with more jobs being created and being ranked the highest quality of life in the UK for students (aside from London).
- Edinburgh offers four main universities in the city just like Manchester; however, it particularly excels with attracting tourism and shines with its entertainment sector. Its important to incorporate what attractions a city has to analyse future steady growth.
These three cities are great candidates for sound investment in the future if you are considering expanding your portfolio. However, it goes without saying investment should be considered elsewhere too to find the perfect student town for you.