Stoke-on-Trent offers the strongest student rental yields among UK university cities, according to analysis by buy-to-let mortgage lender Paragon Bank, with the city recording a return of 9.42% based on the bank's own mortgage application data.
The figures are drawn from Paragon's lending activity in known student postcodes rather than the broader market, and reflect average annual rental income of £14,222 against an average property valuation of £150,982 in Stoke-on-Trent. The city serves both the University of Staffordshire and nearby Keele University.
Plymouth ranked second in Paragon's analysis, producing a yield of 9.27%. Student properties there generated average annual rental income of £35,224 against an average valuation of £379,881, reflecting the city's higher property values relative to Stoke despite its competitive yield.
Liverpool completed the top three with a return of 8.86%, based on annual rental income of £26,399 and an average property valuation of £297,951. Home to the University of Liverpool and Liverpool John Moores, the city is among ten Russell Group locations appearing in Paragon's top 15 table. Portsmouth and Cardiff rounded out the top five, generating average yields of 8.31% and 8.27% respectively. Edinburgh followed at 8.23%, with Coventry, York and Leeds each producing returns above 8%.
Alongside Liverpool and Cardiff, the Russell Group cities of Edinburgh, York, Leeds, Nottingham, Sheffield, Durham, Exeter and Southampton all feature in the 15 highest-yielding locations in Paragon's data, reflecting the scale and stability of student demand in those cities.
The presence of Stoke-on-Trent and Plymouth at the top of the table points to a pattern visible across the dataset: strong student yields are not limited to Russell Group markets. Locations with lower average property values and consistent student demand can produce competitive returns even without the brand recognition of a Russell Group institution.
"As students prepare for the start of a new academic year, these figures demonstrate the strength and breadth of the university rental market," said Louisa Sedgwick, managing director of mortgages at Paragon Bank.
"Cities with Russell Group universities feature prominently, reflecting the large and established student populations found in many of these locations.
"However, the strongest yields are not confined to Russell Group markets. Stoke-on-Trent and Plymouth occupy the top two positions, showing how locations with comparatively accessible property values and strong student demand can offer attractive returns."
Sedgwick also noted the operational demands of the sector for landlords considering entry.
"Student property is a specialist market, so landlords need to understand local demand, the type and quality of accommodation students require and the responsibilities associated with managing shared homes," she said. "Those who approach the sector professionally can play an important role in providing good-quality homes while building a sustainable business."
Across all student postcodes in Paragon's data, properties generated average yields of 7.32%, against 6.86% for non-student postcodes, a gap of 46 basis points that the bank says underlines the income case for landlords active in the university market.
