Mashroom’s University Property Index: The Best Buy to Let Investments
With the release of this year’s A-Level results, our annual University property index has looked at the top 50 universities in the UK as ranked by the Guardian and which provide the most affordable options for those looking to get on the student buy-to-let ladder (with the inclusion of the additional stamp duty cost for a rental property).
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We also looked at which University towns make the best investment in the long-term based on the rental yield of a property in that area.
Buy-to-Let & Second Home Stamp Duty Explained
Last year the rate of stamp duty paid on buy-to-let or second home purchases changed with an additional 3% added for every price bracket. Now anyone purchasing a house up to £125,000 will have to pay 3% instead of nothing. Between £125k-£250k this increased to 5% instead of 2%, climbing to 15% for anything over £1.5m.
The Best of Both Worlds
From a combination of the two, we have highlighted the best four options that appear in both top 10 tables, offering an affordable price tag and high rental yield. It just so happens that each country in Great Britain has one entry in the top four, providing potential buy-to-let landlords in each nation an affordable, high-yield option.
Based on the price tag and rental yield, the best investment options for both an affordable university buy-to-let property, with a good return are Nottingham University, Queen’s Belfast, Glasgow University and Swansea University.
The Top 50 UK Universities
Across the top 50, the average house price is a steep £318,267 largely due to the London based universities with the average stamp duty cost hitting £17,476.
Average House Price – £318,267
Average Stamp Duty – £17,476
Average Annual Rent – £15,822
Average Rental Yield – 5.51%
For those more worried about the long-term return rather than the initial cost of getting on the ladder, the average rental yield across the top 50 university towns is 6%, with the average annual rent reaching £15,822.
Top 10 Most Affordable
The top university town for an affordable foot on the student buy-to-let ladder is Durham with an average house price of just £102,347 and a stamp duty cost of £3,070 totaling just £105,418.
When taking the additional stamp duty cost into account, the rest of the top 10 looks like this.
Dundee University (£122,729), Queen’s University, Belfast (£123,961), Glasgow University (£127,317), Nottingham University (£137,376), Swansea University (£144,888), Keele University (£150,198), Lancaster University (£153,630), Sheffield University (£157,045) and Derby University (£157,253).
Top 10 Largest Rental Yields
Nottingham University climbs the ranks to number one as the best buy-to-let option, with an average house price of £133,215 and an annual average rent of £11,400, Nottingham offers a rental yield of 8.56%.
Again, the rest of the top 10 looks as follows.
