Despite higher fees, demand for student property remains high. Nigel Lewis looks at a recent survey about this market and which universities offer the best potential return on investment.
The number of applicants coming through the university clearing system looks set to drop in 2012 as annual tuition fees treble from £3,000 to £9,000 and, just a few months into the process, applications for courses are already 12% down year on year.
But despite this extra financial burden this is having little impact on the student renting market. Demand for digs continues to outstrip supply in many university cities, and latest figures reveal how this is creating attractive yields in this recession-proof and potentially lucrative market.
Research by PrimeLocation.com reveals that the cities with A+ results are Coventry, Teesside and Chester. No.1 placed Coventry, although only No.63 in the top 100 list for academic results, offers buy-to-let investors an average house price of £98,138, average month rental income of £570 and therefore a gross yield of 7%.
Homes near Teesside University, currently 60th place academically, are second on the list offering yields of 6.9% and the University of Chester, currently 80th academically, takes third place at 6.8%.
The problem with these results is that most students’ parents are less worried about property investment than they are academic results. So where to buy if you want good returns on investment both from property and your child’s education?
The best compromise is the University of Warwick, which is the sixth best university academically, but 17th on the yield list at 5.4%.
But at the other end of the scale, which university towns got the worse marks? Some of Britain’s most famous names did, mainly because the more long-term success a university achieves the higher house prices are locally and therefore the lower the yields tend to be.
Therefore, near the bottom of the investment league is St Andrews at No.79 (3.1%) which is third academically; Oxford at No.77 for yield but No.2 academically and Cambridge at No.58 for yield but No.1 academically.
Read our full list of UK universities by investment potential.