Rental properties in Scotland’s university cities named best for buy-to-let investors
Scottish university cities offer the best chance of profit for buy-to-let investors in the UK, according to new research.
Read more: Scotland's house price growth at its highest since 2007
Edinburgh offers the best average rental yield in the country at 6.11 per cent, according to a study put together by property website Zoopla, while Aberdeen, Dundee and Glasgow are also named in the top five.
Compared to a national average gross yield of 3.92 per cent for a four bedroom property, Aberdeen offers 5.66 per cent, Dundee 5.11 per cent and Glasgow 5.07 per cent.
Meanwhile London – home to many of the best universities in the world – offers an average yield only slightly above the average at 3.97 per cent.
However, landlords are advised that Northern cities may not offer such profitable returns on investment. Middlesbrough and Lancaster are named as the two university cities with the lowest average rental yields in the UK at 1.47 per cent and 1.87 per cent respectively.
"Scottish university cities are currently offering fantastic returns for UK landlords," commented Zoopla's head of public relations Lawrence Hall. "Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments.
"This means for rental accommodation in university areas is very high, as throngs of students compete to live near their campuses. Combined with Scottish house prices still remaining relatively low, this equates to excellent yields.
"Some may be surprised that the golden triangle of London, Oxford and Cambridge are not producing higher yields. However, given those areas have a pedigree of high property prices, buy-to-let investors there would likely spend a higher proportion of rental income paying off their properties' mortgages than their counterparts north of the border."
| University Town | Avg. monthly rent (four bedroom house) | Avg. asking price |
Gross yield |
|---|---|---|---|
| Edinburgh | £2,171 | £426,774 | 6.11% |
| Coventry | £1,780 | £354,449 | 6.03% |
| Aberdeen | £1,912 | £405,153 | 5.66% |
| Dundee | £1,029 | £241,743 | 5.11% |
| Glasgow | £1,187 | £280,787 | 5.07% |
| Warwick | £1,924 | £482,569 | 4.78% |
| Chichester | £1,891 | £480,152 | 4.73% |
| Oxford | £2,148 | £559,312 | 4.61% |
| Bolton | £1,140 | £298,472 | 4.58% |
| Wrexham | £1,043 | £276,320 | 4.53% |