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University cities in Scotland offer the best areas for profit for buy to let investors in the UK, with the overall best average rental yield in Edinburgh, new research has found. The 6.11% yield in Edinburgh came out top in the report from property website Zoopla as Scottish cities took third, fourth and fifth places with 5.66% in Aberdeen, 5.11% in Dundee and 5.07% in Glasgow. The only English university city in the top five was Coventry with an average buy to let rental yield of 6.03% giving the Midlands city second place. University cities in the North of England were found to be among the worst investment opportunities for buy to let landlords. Middlesbrough, where the main Teesside University campus is located, recorded the lowest average rental yield in the UK at 1.47%. The North Western city of Lancaster, home to Lancaster University, 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 research shows the cities hosting the very best universities are not necessarily the very best options for buy to let investors. Cambridge, for example, failed to make it into the top 10 with a below par average yield of 3.65%. Even London, with its world famous London School of Economics and Imperial College London, registered an underwhelming 3.97% average yield while Oxford only managed eighth place in the league table with an average 4.61% yield. ‘Scottish university cities are currently offering fantastic returns for UK landlords. Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments,’ said Lawrence Hall of Zoopla. ‘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,’ he pointed out. ‘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,’ he added. Continue reading →
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