The latest data from property website Zoopla takes average asking prices for four-bed properties within major student centres, and compares these with average student rents achieved. This gives a gross yield.
The city tops the league table by netting landlords annual pre-tax returns of almost 5% on their investment.
Edinburgh also performed above the UK average, with returns of nearly 4% for investors.
The figures were released by property website Zoopla.co.uk, which analysed average gross yields on four-bedroom student properties across the UK. Gross yield is defined as a yearly return on an investment before the deduction of taxes and expenses.
Lawrence Hall, Zoopla.co.uk spokesman, said:
"The largest number of students or the most prestigious university clearly isn't necessarily best for investment returns. Landlords need to do their research and take into account the student demand, property supply, average property values and average monthly rents.
There is no apparent North/South divide when it comes to student buy-to-let investments and a number of towns in the North are showing higher gross yields than the South as a result of property values having remained lower over the past few years whilst rental demand has increased."
Here are the best-performing student buy-to-let cities and towns for landlords, according to Zoopla, with the average monthly rent on a four-bedroom house, the average house price and the gross yield:
1. Glasgow, £1,083, £262,888, 4.95%
2. Hull, £737, £184,440, 4.80%
3. Manchester, £1,053, £275,132, 4.59%
4. Cheltenham, £1,631, £429,585, 4.56%
5. Cambridge, £1,628, £429,976, 4.54%
6. Buckingham, £1,502, £405,017, 4.45%
7. Luton, £1,076, £291,454, 4.43%
8. Bristol, £1,224, £342,699, 4.29%
9. Lincoln, £877, £248,980, 4.23%
10. London, £3,485, £995,104, 4.20%
Here are the worst-performing student buy-to-let cities and towns for landlords:
1. Carlisle, £608, £282,306, 2.58%
2. Middlesbrough, £562, £258,770, 2.61%
3. Bournemouth, £1,452, £564,560, 3.09%
4. Guildford, £1,902, £734,763, 3.11%
5. Stoke-on-Trent, £677, £258,314, 3.14%
6. Bath, £1,520, £579,370, 3.15%
7. Worcester, £946, £359,815, 3.15%
8. Huddersfield, £736, £277,027, 3.19%
9. Derby, £764, £277,808, 3.30%
10. Birmingham, £766, £270,371, 3.40%
Stuart Law, CEO of Assetz, comments:
“The research published today gives weight to a trend we are seeing in the broader buy-to-let market. The London property scene has owned the business page headlines and developments in the capital have been conflated with sentiments on the broader property market and the now clichéd ‘property bubble’.
The ‘London effect’ is not being seen across the entirety of the UK and in Northern regions property prices are yet to see the full price boom already seen in London according to the Office for National Statistics. Most regions still offer a chance to buy at ground level prices and with strong rental income as well.
It is no surprise to me that Glasgow, Hull and Manchester are the top three student buy-to-let towns for investors. They have very strong student populations and therefore strong demand and student investments continue to be one of the strongest property investment sectors.”
