Due to consistent demand and often constrained supply, student property regularly outperforms the wider rental market, with university towns, in particular, delivering strong buy-to-let returns.
Paragon Bank’s latest data shows student postcodes achieved yields averaging 7.39% in June 2025, well ahead of the 6.85% achieved in non-student areas.
Those yields are up from 6.63% two years ago, indicating rents are currently growing faster than property prices in many university locations.
Louisa Sedgwick at Paragon Bank says: “With universities about to commence the new academic year, these figures highlight the enduring strength of the student rental market. University towns like Stoke and Plymouth offer landlords a compelling combination of affordability and strong rental demand.”
The research suggests investors shouldn’t focus solely on the more prestigious institutions. As Sedgwick notes: “While Russell Group universities often anchor strong rental markets, our data shows that high yields are not exclusive to these institutions. Landlords should look beyond the traditional powerhouses and consider emerging university towns where property prices are lower but rental demand remains high.”
And with four non-Russell Group universities in the top 10, Sedgwick is clearly right.
Paragon’s figures show, for the second year running, the top yielding university town is Stoke-on-Trent, with yields of 9.42% – down marginally from 9.43% in 2024. With Staffordshire and Keele universities nearby, the city offers an excellent combination of affordable property (average price £150,982) and solid rents (£14,222 annually).
Plymouth is in second place with 9.27% yields. Property there is more expensive at £379,881, although rents are also higher at £35,224.
Liverpool in top three
Liverpool dropped from second to third place, with yields at 8.85%, although it remains a strong performer. Average rents of £26,299 on properties worth £297,309 show why it is one of the country’s more profitable university rental locations.
Northern cities strong performers
Leeds ranks ninth with 8.01% yields. Rents are pricey at £38,868pa, but property prices (£485,464) are also on the high side. Even so, it remains a popular spot for investors.
Manchester is 18th, with yields at 7.35% and is a solid performer for a major metropolitan area. Rents average £30,356 on properties worth £412,881.
Birmingham is just behind (19th) with 6.8% yields. Despite generating strong rents (£36,042), the city’s high property prices of £530,366 mean yields are not quite as high as some of the other locations in the top 20. However, when you consider there are approximately 80 university towns in the UK, it is still ahead of 61 of them.
Summary Table
| Town/city | Average rental income | Average valuation | Rental ratio |
| Stoke-on-Trent | £14,222 | £150,982 | 9.42% |
| Plymouth | £35,224 | £379,881 | 9.27% |
| Liverpool | £26,299 | £297,309 | 8.85% |
| Southsea (Portsmouth) | £39,215 | £472,121 | 8.31% |
| Edinburgh | £32,789 | £398,320 | 8.23% |
| Cardiff | £31,804 | £387,052 | 8.22% |
| Coventry | £28,952 | £354,858 | 8.16% |
| York | £39,360 | £484,958 | 8.12% |
| Leeds | £38,868 | £485,464 | 8.01% |
| Nottingham | £30,702 | £385,185 | 7.97% |
| Loughborough | £27,725 | £353,552 | 7.84% |
| Sheffield | £26,866 | £342,659 | 7.84% |
| Durham | £36,452 | £469,359 | 7.77% |
| Exeter | £44,659 | £579,036 | 7.71% |
| Southampton | £29,178 | £380,648 | 7.67% |
| Bristol | £42,515 | £565,756 | 7.51% |
| Newcastle upon Tyne | £36,882 | £498,617 | 7.4% |
| Manchester | £30,356 | £412,881 | 7.35% |
| Bath | £40,988 | £567,386 | 7.22% |
| Birmingham | £36,042 | £530,366 | 6.8% |
