Uni property – a good buy?

The Sunday Times questioned whether buying a property for occupation by student children was still a good idea. It has worked very well in the past for parents wanting to help their children through university – income from renting out rooms to other students means the net cost can be well below just paying for the student’s accommodation costs. However, the yields available on student BTLs have fallen from as much as 9% a few years ago. Today, the best returns are in Glasgow where a 3-bed property costing £150,000 can return 6.8%. Though yields in cities like Bristol (where a 3-bed flat costs £225,000) and Cambridge are much lower at 4%-4.5%, properties in these places are usually easier to sell than in towns where prices are lower.

Many parents bought uni properties planning to sell them when their child graduated but ended up becoming unwilling landlords because they couldn’t sell. So parents considering this option should be prepared to be in for the long term.