Research shows that buy-to-let investors should look North

6 September 2011


  • Durham property returns highest rental yields
  • London is top for capital growth


The city of Durham offers parents looking to invest in a buy-to-let property while their child is studying at university, the highest income return but it’s London that returns highest capital growth, according to research conducted by property specialists Move with Us.


The research, which looked at well-known English towns and cities, reveals that Durham returns an average rental income of 8.1% per annum with York, Newcastle and Liverpool, averaging 8%, 6.6% and 6.3% respectively making these the top four university cities for buy-to-let investors seeking high rental yields.


Towns and cities offering highest levels of income:


University name

Flat price

Average rental price monthly

Average rental price per year

Average rental yield

Durham University





University of York





Newcastle University





University of Liverpool






For parents investing for capital appreciation the Move with Us data shows a disappointing story with London experiencing an increase in average property prices over the past five years[1]; an increase of 10.7%. The city of York experienced 3.8% growth, the only region outside of London to have a positive rise. All of the other regions experienced negative growth in property prices; the traditional university town of Cambridge faired the third best, experiencing a 1.6% loss over the past five years.


Robin King, Move with Us director, says; “The London property market is an international market and we often see nationwide trends which do not correlate with London. It is quite clear that over the short-term, of five years, investors will have seen the value of their asset decrease. It is important therefore, that any parent looking to purchase a property for their child, to use while at university considers it an investment which would be best to hold onto for the long-term, until the opportune moment to sell.”


Universities in regions with the highest levels of growth:





University name

Average price March 2006

Average house price June 2011

House price change


Imperial College London



10.7% increase


King’s College London



10.7% increase


London School of Economics and

Political Science



10.7% increase


University College London



10.7% increase


York University



3.8% increase


Exeter University



0.7% loss


University of Cambridge



1.6% loss


University of Oxford



9% loss


University of Southampton



9% loss


Robin added: “Many people purchase buy-to-let property for their children to live in at university. If you want to a buy-to-let investment to be a viable source of income beyond the years your child will occupy the property, there are a number of important criteria that should be carefully considered.


“Good properties are not necessarily a bargain just because they’re cheap; properties in extremely run down areas are often competitively priced but difficult to rent to tenants and not so attractive when it comes to the resale. Location is paramount and you need to ensure that prospective tenants will want to rent the property to avoid any vacant periods whilst still maximising the rental yield.


“With tuition fees rising in 2012, parents looking to invest in property should look at the potential rental yields for the property and area before making the commitment to buy. This research highlights that whilst house prices have decreased over the last five years, average rental prices have significantly increased, creating prosperity in the buy-to-let market.”


[1] Comparison of average property prices from March 2006 and June 2011.

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