Middlesbrough leads the market on student rental yields, with an average gross advertised yield of 24.3%, according to new analysis from Accommodation for Students. Some of the country's most affordable student cities are also producing the strongest potential returns for landlords.
Hull follows at 12.8%, then Wolverhampton at 11.9%, Plymouth at 11.8% and Stoke-on-Trent at 11.7%. Northampton recorded 11.4%, Liverpool 11.3%, Durham 11.2%, Lancaster 10.8% and Gloucester 10.1%, completing the ten highest-yielding ranked locations.
The results carry extra weight because Middlesbrough, Stoke-on-Trent and Hull also featured among the cheapest student rental locations in earlier Accommodation for Students research. Average advertised rents in Middlesbrough and Stoke-on-Trent stood at £103 per person per week, while students in Hull paid £107.
All three now sit among the five highest-yielding markets, suggesting lower-cost locations can offer a more favourable balance for students seeking affordable accommodation and landlords looking for a viable return.
Student rental yields vary widely by city
Across the student property market in England and Wales, the average gross advertised rental yield stands at 8.4%. The findings reveal considerable differences depending on where landlords invest and the type of property they own. The analysis covers 22,107 privately marketed student properties across 61 cities and 312 named student areas, making it one of the most extensive examinations of student rental yields in England and Wales.
Relatively affordable property prices helped several northern and Midlands university locations outperform more expensive markets, even where landlords elsewhere could command substantially higher rents. In Middlesbrough, average advertised annual rental income of about £24,300 against an average local property value of about £100,000 produced a gross yield of 24.3%. London offers considerably higher advertised annual rental income at about £36,200, but an average property value of around £698,000 resulted in a gross yield of just 5.2%.
Kingston recorded the lowest-ranked yield at 4.5%, followed by Bedford at 5.0%, London at 5.2% and Canterbury at 5.5%. Guildford and Cheltenham both averaged 5.8%, while Oxford recorded 5.9%.
Location is only part of the picture, as the type and size of a student property also has a significant influence on potential yield. Flats with three or more bedrooms were the strongest-performing segment, averaging 12.5%, with average advertised annual rental income of about £30,800 against an average property value of about £246,400.
Larger shared houses also performed strongly, with houses of six or more bedrooms producing 9.4%, compared with 8.4% for three and four-bedroom houses and just 5.2% for houses with one or two bedrooms. Five-bedroom houses averaged 7.0%, however, so adding bedrooms does not automatically lift yield, and local purchase prices and student demand remain critical. Two-bedroom flats averaged 8.9%, studios 8.5% and one-bedroom flats 7.4%.
The strongest property type also varied between cities. Hull produced the highest-ranked yield for one- and two-bedroom houses at 11.9%, while Middlesbrough led for three- and four-bedroom houses at 24.3%. Nottingham was the strongest market for houses with six or more bedrooms at 10.6%, Preston led the one- and two-bedroom flat categories, and Newcastle recorded the highest-ranked yield for flats with three or more bedrooms at 13.1%.
The Accommodation for Students Rental Yield Report provides city, property-type and neighbourhood-level analysis of student rental markets across England and Wales.
"What is particularly interesting is that several of the locations producing the strongest gross yields are also among the more affordable places for students to rent," said Simon Thompson, managing director of Accommodation for Students.
"Middlesbrough, Hull and Stoke-on-Trent all appeared near the top of our affordability research and now feature among the five highest-yielding markets.
"That balance is really important because a healthy student rental market needs to work for both sides. Students need good-quality homes at prices they can afford, while landlords need sufficient returns to justify continuing to provide them.
"The findings also show why landlords cannot look at either rent or purchase price in isolation. Some of the highest student rents are found in more expensive university cities, but that does not necessarily translate into a stronger yield. Nor is there a single type of student property that will work everywhere. Larger shared houses and flats can generate more rental income, but they may also bring higher purchasing, management, maintenance and regulatory costs.
"Gross yield is an important starting point, but it is not the same as profit. Landlords still need to consider achievable rents, local student demand, void periods, licensing, finance and running costs before deciding whether an individual property represents a sound investment."
