| The areas where student landlords can expect to see the best yields has
been revealed in new research.
According to The Mistoria Group, landlords with student properties in the
North West outperformed standard buy to let properties for return on
investment and yield.
The research also reveals the average gross return - before voids or
charges are deducted - has risen by between 11% and 13%.
The average gross return of other buy to let properties in the North West
is between 6% and 8%.
Investors with a student HMO property
And over the past five years, investors with a student HMO property have
also enjoyed higher returns than other investors.
They say that HMO investors enjoyed returns that were between 10% and 15%
on average, compared with the 5% and 10% average enjoyed by other BTL
investors.
The group's managing director, Mish Liyanage, said that HMOs are a crucial
part of the housing sector in the UK and offer affordable accommodation to
students.
He said: "In the North West, we are seeing demand growing for HMO student
property because it offers high occupancy rates, good capital growth and
excellent yields."
The report highlights that HMOs are becoming a popular investment in
Salford, Manchester, and Liverpool.
HMOs within walking distance of university
Mr Liyanage added: "Investors need to be cautious, however, and buy a
property in the right area because yields can vary by postcode
dramatically. HMOs that are in walking distance of university, or a short
train or bus journey, will have the highest rents usually."
The managing director of Accommodation for Students, Simon Thompson, said:
"Quality student properties close to a university campus will always be
popular and command high rents and deliver better yields. The future of
student accommodation is still looking strong, even with the potential of
another Covid-19 lockdown potentially affecting student courses."
Lack of students sees London rents fall
Meanwhile, the lack of students in London is leading to rents in the
capital being reduced.
The findings from Chestertons, one of London's largest lettings agencies,
says there were twice the number of rental homes available in September
compared with last year.
This has led to a 325% spike in the number of landlords reducing their
rent, they say.
Chestertons says that September is usually their busiest month with
overseas tenants returning to London, plus large numbers of students
signing up for properties after London’s universities confirm places.
The firm's head of lettings, Richard Davies, said: "It is clear, however,
that sensibly priced properties in this market will find tenants, and
landlords are quickly reacting and adjusting prices accordingly."
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