Student properties are the highlight of the buy to let market.
Student properties are outperforming the remainder of the buy to let market, so states new research.
Landlords who focus on renting to students record average gross yields of 7%, in contrast with a market average of 5.6%, a difference of about 25% so research by Paragon Mortgages reveals.
Buy to let landlords whose portfolios consist of more than 50% student properties record an average yield of 8.6%.
The student housing market is driven by strong tenant demand. Should landlords choose the correct type of property in the correct location, the returns from students can be pretty lucrative.
Small towns with relatively new and expanding universities have experienced the strongest increases in tenant demand.
The Young Ones type of student is not the norm any more. Students are caring for the property they are in to avoid losing deposits as well to avoind costs for repairs and replacements.
Hence a greater proportion of the housing stock is in better condition than before, also due to greater investment by landlords and more rigourous regulation.
An Ezylet.co.uk poll highlights that 20% of landlords would sell up one property or would invest abroad should UK interest rates rise. 41% stated that should interest rates rise above 6% their profit margins would all but disappear.
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Student Properties Outperform Buy to Let
Tue, 02 Oct 2007
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