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Survey reveals high yields north of border

Scottish university cities top for buy-to-let returns

Rented propertyScotland’s university cities are providing buy-to-let landlords with the best returns on property, according to new research.

It shows cities north of the border occupying four of the top five best locations for investors.

Edinburgh tops the list with an average rental yield of 6.11%, which is the best in Britain. Aberdeen came third, yielding 5.66% and Dundee fourth, posting a 5.11% average yield.

Glasgow achieved fifth place with a yield of 5.07%.

English city Coventry came in at second place, with a 6.03% average yield.

The research by property website Zoopla shows university cities in the North of England to be among the worst investment opportunities for buy-to-let landlords.

Middlesbrough, home of Teesside University, had the lowest average rental yield in the UK –  1.47%. Lancaster, home was the second-worst performer, with a 1.87% yield, while Lincoln posted an average yield of 2.14%, the third-lowest in the league table.

The study showed that being a top university did not equate to have a high yielding rental market. Cambridge failed to make it into the top 10, posting a yield of just 3.65%. Oxford fared better with 4.61%, putting it in eighth place. London came in with a 3.97% average yield.

Across the UK, the average rental yield on a typical four-bedroom property is now 3.92%.

Lawrence Hall of Zoopla said: “Scottish university cities are currently offering fantastic returns for UK landlords. Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments.

“This means demand for rental accommodation in university areas is very high, as throngs of students compete to live near their campuses. Combined with Scottish house prices still remaining relatively low, this equates to excellent yields.

“Some may be surprised that the golden triangle of London, Oxford and Cambridge are not producing higher yields. However, given those areas have a pedigree of high property prices, buy-to-let investors there would likely spend a higher proportion of rental income paying off their properties’ mortgages than their counterparts north of the border.”

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