Student properties 'offer increasing yields for landlords'

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Landlords with student properties in their portfolios are reporting healthier returns than those in the wider buy-to-let market, a new report suggests.

Paragon found that yields on student properties are typically around 25 per cent higher than those on other types of rented homes.

Portfolios which include student properties generated an average gross yield of seven per cent - compared to 5.6 per cent for those without student homes.

In portfolios where student properties made up more than half the investments, yields grew to an average of 8.6 per cent.

"Strong tenant demand in the student market is driving yields in that sector," explained Nigel Terrington, Paragon's chief executive.

"If landlords select the right type of property in the right location, the returns from the student market can be extremely healthy.

"Most student landlords will have let their property for the following academic year by early spring due to the strong level of tenant demand and the competition between students for the better quality properties is fierce. This gives pricing power to the landlord."

The report added that student properties are attractive to landlords as void periods are typically low and yields are increased because the houses are let on a 'per room' basis.

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