Month: April 2022

There are 164 universities and higher education institutions across the UK. The majority of students studying at these locations move away from home and require a second residence whilst at university.

But which student city is the best for landlords and where can they make the most money?

CIA Landlords has conducted research looking at metrics such as student population vs. general population numbers, number of households per city and average rent in student areas to find this out.

London named the UK city with the most potential profit for student landlords

When looking at the estimated number of student households in a city as well as the average yearly rent from student area properties, our team has found the cities with the most potential profit for student landlords.

London comes out on top for the highest estimated yearly rental market for student landlords with approximately £2,661,110,735 revenue each year, we must take into consideration that London can also be an extremely costly place to invest in multiple properties. There is also much larger competition in London for student lets, as students who come to the UK’s capital don’t necessarily live in specific ‘student’ style areas like they do around other student cities in the UK.

Those wondering if they should get into the student landlord business who want to avoid the capital city should opt for Durham and Belfast in order to have a good chance of finding many students looking for properties, as well as making a good return. Our study found that Belfast’s population is 22.1% students and student landlords in the city can set to make approximately £266,572,173 per year. Durham’s large student population (33.6%) means that their student landlord yearly market stands at around £771,746,489.

Both Durham and Belfast do not have the most expensive average student area rent costs, but the percentage of their city’s residents that are university students gives landlords here an abundance of opportunity with a much higher demand for student-friendly properties.

On the other end of the scale, our study found that student landlords in cities such as Reading, Derby and Luton may struggle more than others, with a much smaller student market and therefore less opportunity for student landlords.

Ranked: The UK cities with the most potential profit for student landlords

Oxford and Bristol have the highest average rent in student areas outside of London

To find out which cities had the highest average rent prices for students, our team looked at the average price of rent in three of each city’s most well-known areas for students to live. We then took the average price of a 1-4 bedroom property in the area.

According to our data, student areas in Oxford and Bristol have the highest average rent in the UK. These universities are not only known for their high rankings in the university tables, but their high rent costs too.

Prices of rent average £1,788.28 per month in Oxford in areas such as the city centre and Jericho, and £1,544.93 in Bristol in student areas such as Redland and Gloucester Road.

Derby, Durham and Sheffield have the lowest average rent prices for students in the UK

According to our study, Derby comes out as having the cheapest average rent prices for student properties in the UK, with the average rent found to be around £728.22 per month in its student areas such as Buxton and Allestree.

Perhaps more surprisingly, despite its high rankings similar to that of Oxford and Bristol, Durham comes out as one of the cheapest places to rent as a student in the UK. The north-eastern city has average student rent prices of £782.15 when analysing average rent in student areas such as Gilesgate and Claypath.

Sheffield comes third overall for the cheapest student rent average in the UK (£800.08) with areas such as Crookes and Sharrow popular places for students to search for a property.

Despite being the capitals of Wales and Northern Ireland respectively, Cardiff and Belfast came fourth and fifth in our study for the lowest average rent for student areas. Cardiff’s average rent per month in its student areas was found to be around £821.67 per month, whilst Belfast’s is around £832.40 in areas such as The Holylands and Ormeau Road.

Most to Least Expensive Cities for Student Area Rent Prices:

Over a third of Durham’s population is students, the largest percentage in the UK

The UK has a huge student population, however, some cities’ student populations have a much bigger impact on the locations they are in than others.

Some cities, for example, such as Durham see their population grow by over a third (36.3%) in size when including their student residents.

Oxford and Cambridge may be big-name universities but the cities themselves are relatively small, meaning their student populations actually make up a large proportion of their residents. Oxford has the second largest student population compared to its general population at around 29.5%, whilst Cambridge’s students take up just under a quarter of their population at 23.4%.

London, Liverpool and Reading have the smallest student population percentage in the UK

Though London may be home to around 212,155 students, university students in London only take up a small proportion of the capital city’s overall population (2.8%).

Reading in the UK has the second smallest student population compared to their overall population with just 6.3% of their city population being university students. Where sometimes cities in the UK are home to numerous universities which mean higher student numbers, Reading has less than 20,000 students residing in the city who study at their one university.

Despite Liverpool’s five universities, the city’s student residents only take up 7.3% of its overall population making it the third smallest city in the UK for percentage of university student residents. Liverpool is known for its cheaper accommodation – the combination of this and its small percentage of students in the city makes it a potentially less attractive option for student landlords.

Methodology

To find out the percentage of each city’s residents taken up by their student populations, we took the student population of each city and divided this by the overall number of residents in each city.

To find out the number of student properties in each city, we took the percentage of student population and applied this to the overall number of properties in the city.

To find out the average rent costs for students in each city, we looked at three of each city’s most popular student areas, determined using desk research. We then used housesforsaletorent.co.uk and took the average price for 1-4 bedroom properties in these areas.

By taking the approximate number of student households in each city and the average yearly rent of properties in student areas, we then ranked the best cities for the student landlord rental market.

Student status – those who are at registered universities in the UK according to HESA

Note: Students at Open University have not been counted within this study due to options for online-only study from many locations.

Sources

• housesforsaletorent.co.uk

• worldpopulationreview.com

• hesa.ac.uk

• unipol.org.uk

• studenthousesheffield.com

• Unilodgers.com

• savethestudent.org

• student-cribs.com

• edvoy.com

• cpshomes.co.uk

• vivamanchester.co.uk

• prem-lets.co.uk

• studenthousingguide.co.uk

• qub.ac.uk

• smartproperty.co.uk

• southampton.ac.uk

• student.com

• estateagentnetworking.co.uk

• sophicproperty.co.uk

• Ons.gov.uk

• Thisisfresh.com

• Accommodationforstudents.com

• accommodation.cam.ac.uk

The Rise of Airbnb: Which Cities Are the Most Profitable for Airbnb Landlords?

In recent years there has been an influx in travellers staying in Airbnbs, and the site now showcases more than six million rooms, flats and houses in more than 81,000 cities across the globe. But where can landlords looking to venture into this space expect to make the most money?

A new study by CIA Landlord Insurance has revealed the average cost to stay in an Airbnb around the world, in the city and close to renowned landmarks, along with the cost to buy properties here, to reveal the most profitable cities for landlords.

Landlords With Airbnbs Near The Burj Khalifa Make The Most Money 

In the last 40 years, Dubai has become a city of skyscrapers and many have flocked here for city breaks and hot holidays. But how much money can landlords make here?

Landlords who have a property close to the Burj Khalifa, the world’s tallest building, are making the most money of all Airbnb owners. With the average cost of staying here sitting at £930 a night, Dubai is the most expensive Airbnb location across the globe. This means landlords can make £6,510 if guests stay for 7 nights. However, this is only a profitable location for landlords who have a property near the Burj Khalifa, as those further away rent for just £181 per night.

New York ranks second for charging the most for Airbnbs, with those near Central Park costing £767 per night. However, landlords can still make money if they have a property further away as the going rate is £534 per night. This makes New York City, as a whole, the most profitable location for Airbnb landlords.

Although landlords can clearly make money from buying properties within these locations, where in the world will it take them the least amount of time to earn their money back?

The following table shows the cities with the biggest price difference in the cost of staying in an Airbnb near a landmark compared to the city: 

Landlords Who Buy Airbnbs Near the Burj Khalifa Could Make Their Money Back in Just Four Months 

Landlords in Dubai can not only make the most money, but it takes them the least amount of time to earn it back after investing. With the average price to buy an apartment in the city costing £112,624, landlords would need to have guests stay for an average of just 121 nights to break even. This does, however, exclude any expenses or costs for furnishing the property, so landlords should factor this into their overall outgoings too.

The second most profitable location for landlords is Hilo, in Hawaii, where it takes just 200 nights to be sold for landlords to make their money back. With the average cost of buying an apartment here also over half that in Dubai, £51,300, this is a safer investment option for those just beginning their Airbnb journey.

The following table shows the cities where it will take landlords the least amount of time to earn their money back if they Airbnb a property: 

London Ranks Fourth for Being the Least Profitable Location for Airbnb Landlords 

Whilst there are many places around the world where landlords can earn their money back quickly, Cuzco, in Peru, is extremely unprofitable for Airbnb landlords. It would take over 13 years (4,810 nights) for a landlord to earn their money back here, and that is if the property was occupied by a paying customer every single night. This is 3,875% more than that of Dubai. and is primarily due to the extremely low nightly costs of Airbnbs.

London ranks fourth for being the least profitable and Airbnb landlords can expect it to take over five and a half years (2,803 nights) to earn their money back after investing in a property here. With the average cost of buying a one-bed apartment being £524,088, landlords here would need to charge more to make their money back quicker.

But which cities around the world are in demand and have the most travellers?

The following table shows the cities where it takes landlords the longest to earn their money back if they Airbnb a property: 

Central Park Is the Most Instagrammed Landmark Across the Globe 

With social media on the rise, the want for travellers to get that picture perfect backdrop is increasing. The most instagrammed landmark across the Globe is Central Park in New York, where over seven million photos have been posted across the social media site along with the hashtag ‘#CentralPark.’

Paris ranks second, with the Eiffel Tower hashtag following closely behind with just under seven million photos and Dubai comes third with just over five and a half million instagram photos tagged at the Burj Khalifa. With the world’s tallest building only being finished in 2010, it is clear that Dubai is a city that is highly desired by travellers and has seen an immense amount of popularity in the last decade.

The USA is home to the majority of the most instagrammed landmarks, making it the most desired country for travellers looking for the perfect picture. Whilst this does not suggest that these are the most profitable places for landlords who want to begin their Airbnb journey, there is definitely a demand here for people needing a place to stay as there is clearly popularity around the landmarks.

The following table shows the cities where there are the most photos tagged with their landmark’s hashtag: 

Whilst landlords may be sceptical about investing in properties for the purpose of Airbnb’s, it is clear that there is a demand for properties in this space, and it is a profitable business move. It is important, however, that landlords weigh up the pros and cons of investing abroad, especially in countries in other continents where maintaining properties and guests will be harder. If these problems can be overcome then evidently they will see a healthy return.

Methodology 

The average cost of staying in an Airbnb near the city’s landmark was used to compile all the properties that were available from July 8-9, 2023, for two adults sharing a room. Please note the average price for Airbnb’s in Singapore close to landmarks is higher due to the number of high-end hotels in this area.

All data for the average cost of a property was collected from city-specific pages on numbeo. We used the closest city to the landmark when the data for that location was not available.

How long it would take landlords to earn their money back was determined by the average size of a 1-bed apartment being 450 square feet. The price of the apartment was then divided by the avg. airbnb price per night.

Sources

www.airbnb.co.uk

www.numbeo.com