As the new university term begins, data from online mortgage broker Trussle has revealed that parents feel property will play a big role in helping to support their children through university.
Most interestingly, Trussle found that 66% of parents are considering purchasing a buy-to-let property near their child’s university to alleviate living costs during their studies. As such, in the face of high student fees and rising living standards, parents are once again looking at property as a sound investment to provide security for their family.
The survey was completed by 2,000 homeowners with children and also found that, of those surveyed, 53% of parents would consider downsizing to help support their children through university.
While the private rental sector (PRS) has been affected by changes to taxation and the Stamp Duty surcharge in recent years, student rental properties remain an attractive proposition for investors. Recent research has found that student buy-to-lets consistently outpace the rest of the PRS market, by as much as 17.86% in rental yield.
For those contemplating a buy-to-let property in a university town, Trussle has also identified the top towns and cities that offer the best rental yields. Using the Times Higher Education guide to calculate the property prices and rental yields in the top 30 universities across the UK.
| University (Rank) | City/town | House Price | Rental Income (pcm) | Rental Income (annual) | Rental Yield |
| Newcastle University (20) | Newcastle | £192,567 | £1,508 | £18,096 | 9.40% |
| University of Southampton (16) | Southampton | £235,911 | £1,757 | £21,084 | 8.94% |
| Cardiff University (28) | Cardiff | £274,531 | £1,748 | £20,976 | 7.64% |
| University of Reading (=29) | Reading | £279,139 | £1,744 | £20,928 | 7.50% |
| University of Manchester (8) | Manchester | £246,473 | £1,518 | £18,216 | 7.39% |
The research also revealed the UK’s cheapest university towns to purchase a buy-to-let property. Offering the most value for money, Belfast topped this list with an average house price of £152,175, followed by Aberdeen (University of Aberdeen, £154,480) and Dundee (University of Dundee, £174,173).
| University (Rank) | City/town | House Price |
| Queen’s University Belfast (=29) | Belfast | £152,175 |
| University of Aberdeen (22) | Aberdeen | £154,480 |
| University of Dundee (=29) | Dundee | £174,173 |
| Newcastle University (20) | Newcastle | £192,567 |
| University of Glasgow (10) | Glasgow | £193,388 |
Miles Robinson, Head of Mortgages at Trussle, comments: “It’s true that buy-to-lets aren’t the bargain that they once were. Changes to tax and the Stamp Duty Surcharge have impacted returns, which made rental the king of investments, leading to a peak in popularity during 2007.
However, this new data shows that property is still seen as a safe and reliable way of generating extra income. This can be both in the short term, through rent collection and long term gains in house prices. In addition, the low interest climate means would-be landlords can lock-in a competitive buy-to-let mortgage, which are typically interest only.”
Trussle has found that there are currently over 10,000 buy-to-let deals on the market from 71 lenders, with interest rates as low as 1%.
