Students and young singles generate the highest yields for landlords.
Buy-to-let mortgage firm
Paragon, used independent research from The Landlords Panel from
BDRC Continental and found the average *yield generated by students is 6.45 per cent while young singles generate 6.22 per cent. The average yield across the market as a whole is 6.2%.
Christian Harper of flat-fee estate agent OliverFinn: “We find lots of properties to let in and around W4 for students in The
Arts Educational School in Chiswick and
Imperial College London in South Kensington.
Landlords are sometimes nervous about renting to students but in our experience they're generally good tenants.
Buy-to-rent
Another aspect of the annual student intake is the possibility of parents acquiring buy-to-let properties for the duration of the course. This is a sensible option as they can let other rooms to friends to help cover the mortgage,
and they can put the property back on the market at the end of the course.
Harper: “On a £450,000 three bedroom flat in W4, W3 or W6 for example, the monthly mortgage payment would be around £1500-2000. Two of the bedrooms could be sub-let for around £700 each totalling £1400 per month rental income. The accommodation for the principal student costs next to nothing and the parents still own a property with potentially three-years
of capital appreciation."
On the downside, the properties tend to require a higher degree of maintenance, so landlords have to factor this into the equation.
*Yields - a property's annual rental income as a proportion of its current value - are an important factor for buy-to-let landlords.
