Top University Towns For Rental Returns

Property News

New research from AI powered, property investment portal www.oneandonlypro.com shows that despite Oxford and Cambridge topping the university league tables in the UK, they score poorly for property investment, offering much lower rental yields and capital appreciation than the top university towns and cities in the North East, North West and the Midlands.

Taking the top hotspot, is Newcastle, with 12.8% of properties found to have ‘Diamond’ investment status by One and Only Pro’s unique algorithm. Offering the most affordable property of all the university towns and cities, the average Diamond property in Newcastle costs just £96,573.25.

In second place, with an average property price tag of £117,152.06 is Nottingham with 11.3% of Diamond properties, followed by Leeds, which came in third place with 6.5% and an average £103,376.84 Diamond property price.

Fourth and fifth place went to Sheffield (5.8) and Manchester (5.6), both cities offering a sound investment, with an average Diamond property price of £85,938.70 and £143,014.87 respectively.

The analysis ranked the top universities in England and Wales areas based on the percentage of Diamond properties on the market in June 2019.  Investment properties were given a score from one to ten, with properties rated ten, dubbed Diamond properties and the most likely to increase in value.

Properties which score ten are a once in a lifetime investment, that will sell quickly.  Properties with scores between seven and nine will out perform other similar properties.

Top University Towns & Cities for Property Investment

Rank University % of 10’s Yield (Average first 10) Roci (Average first 10) Average Price 10’s
22nd Newcastle University 12.8 21.8 71.8 £96,573
19th University of Nottingham 11.3 20.6 70.4 £117,152
14th University of Leeds 6.5 17.8 55.8 £103,376
33rd University of Sheffield 5.8 16.8 55.4 £85,938
15th University of Manchester 5.6 17.7 55.3 £143,014
13th University of Birmingham 2.9 22.9 77.1 £167,245
44th University of Leicester 2.7 18.4 61.1 £99,753
5th Imperial College London (SW7) 2.5 8.9 28.3 £1,609,499
4th London School of Economics and Political Science (WC2) 2.5 8.4 26.6 £970,000
25th King’s College London (WC2) 2.5 8.4 26.6 £970,000
10th UCL (WC1) 2.3 8.3 28.4 £699,000
1st University of Cambridge 1.7 13.5 41.4 £226,153
20th University of Southampton 1.7 10.8 33 £122,955
30th University of York 1.2 10.4 34.6 £211,005
41st Queen Mary University of London (E1) 1.1 12.5 43 £1,019,676
16th University of Bristol 0.8 12.8 29.8 £240,300.00
2nd University of Oxford 0.5 9.1 28.6 £288,750.00
11th University of Exeter 0.3 9.7 28.6 £277,650.00
32nd University of Sussex (BN1) 0.2 8.3 24.1 £252,500.00

Source: One and Only Pro, June 2019

* Source: ROCI is the return based on the actual deposit or money invested in a property in the first 12 months, whereas yield is the percentage return based on the full purchase price of the property.  In ROCI, expenses such as service charge, ground rent and insurance are included. A ROCI of 50% would mean in the first year, the rent will equal 50% of the deposit and within a two years, an investor would have earnt all their deposit back.

Henri Sant Cassia, CEO at www.oneandonlypro.com comments: “As expected, the highly sought after university cities of Oxford and Cambridge are giving investors poor returns, thanks to inflated property prices and lower rental yields than many other parts of England and Wales.

“With the BTL tax changes and increased stamp duty on second homes, it pays investors to avoid buying property in the top five ranked university cities in London and the South East, as average prices are very high and rental yields are much lower – averaging 4-6%, compared with properties in the North West, which offers rental yields in excess of 10%.

“Less sought areas such as  Newcastle can earn almost 71% return on investment. This figure includes the costs of buildings insurance, a gas safety check, service charges and ground rents and it is all calculated automatically on our website.

“With this kind of return, savvy investors could have earned their deposit back within two years. In many towns and cities with returns like this, a property’s mortgage can be cleared from the returns within several years and then investors have full ownership.”

One and Only Pro predicts which properties are most likely to see the highest yields and capital growth, using a mathematical analysis to provide investors, lenders and mortgage brokers with an easy to understand scoring system, allowing them to identify the best deals on the market.  The unique algorithm shows the properties most likely to increase in value and demonstrates potential yields, providing highly valuable information, at the touch of a button.

The website features thousands of available properties which users can compare and contrast using a range of innovative AI-powered features, including capital appreciation, potential scores and rental yields. It already hosts over 210,000 opportunities, almost 9,000 of which are below market value, with almost 25,000 listings yielding higher than 7%.

For further information, please visit  www.oneandonlypro.com.

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