Anyone planning to invest in buy-to-let rental properties should consider Liverpool. The North-West city is the top of the league of buy-to-let hotspots in the UK, according to research by Totally Money. For the purposes of investment, university cities outside London are providing landlords with rental yields of up to seven times more than they would get in the capital. On top of this, house prices are much lower. The best bet is in Liverpool, where yields are close to 12%. The postcode L7 is the top area to consider, with yields of 11.79%, followed by L6, with yields of 11.59%. These postcodes are close to Liverpool’s three universities: University of Liverpool, Liverpool John Moores University, and Liverpool Hope University.
What student renters look for
Investing in accommodation for students
Liverpool has around 70,000 students, which is boosting demand for rental properties. Investing in areas close to the university makes sense, especially when you look at property prices and the average monthly rent. In L7, the average monthly rental yield is £1,162 and the average house price is £118,225. In L6, the average monthly rental yield is £1,046 and the average property price is £108,940.
If students are your target market, you need to consider the type of accommodation they prefer as well as the location. In addition to being near the university, they will also want to be near good nightlife and have efficient public transport links to the shops or the gym. Fast Wi-Fi is also important.
If investing in buy-to-lets, you will need to keep on top of the paperwork and ensure you are working within the law and local authority regulations, particularly if you are investing in Houses of Multiple Occupancy, which need a licence. For paperwork such as contracts, right to rent checks, check-ins and check-outs, you can get software to help with this and ensure all paperwork is in one place. For property inventory software, take a look at https://inventorybase.co.uk/.
Other buy-to-let hotspots worth considering
Where else to invest?
Other areas to consider are the TH1 postcode area of Middlesbrough. Whilst the average monthly rental yield is low at £595, so are property prices; the average of £65,238 gives a yield of 10.94%. Edinburgh EH8 is the next best performing buy-to-let hotspot with yields of 10.62%, followed by Manchester M14 with a 10.08% yield and Newcastle NE6 with a 9.48% yield.
Summary
This article names Liverpool as the UK’s top buy-to-let hotspot, with postcodes L7 and L6 offering rental yields close to 12% thanks to demand from around 70,000 students. It covers what student tenants look for beyond proximity to university, such as nightlife, transport links and Wi-Fi, plus licensing rules for Houses of Multiple Occupancy. It lists other strong-yielding areas in Middlesbrough, Edinburgh and Manchester.
Questions this article raises
- How have these rental yields changed since this research was published?
- What licensing costs are involved in running a House of Multiple Occupancy?
- How does investing near a university compare with other buy-to-let strategies long term?
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