The number of students applying for places at university this September has dropped by around 50,000 according to the University and College Admissions Service (UCAS), a fall which has been partly attributed to the increase in tuition fees – but despite this fall, demand for student accommodation remains high.

If you’re in a position to invest in a buy-to-let property specifically aimed at the student market, it offers attractive income returns – particularly compared to the current stock market volatility and low returns offered on savings accounts.

Additionally, if your son or daughter is heading off to university, investing in a property for them to live in and renting out the rest of it can provide a cushion against the impact of tuition fees and student living costs on the family finances.

It could also be a start on the property ladder for them, if you decide to put the house in their name. In these circumstances you would have to stand as guarantor, which means that your home would be the collateral should anything go wrong – so make sure you trust them to come up with the monthly mortgage payments before proceeding with this type of arrangement.

But before you even begin, sit down with pen and paper and do the maths. Traditionally, lenders for buy-to-let properties asked for a 15% deposit, but this has now gone up in most cases to 25%. Not all lenders are keen on student lets – check with your mortgage adviser, who will have a database of likely providers.

Yields vary considerably between university towns. Investing in somewhere close by has the advantage of allowing you to keep an eye on the property, but somewhere further afield may provide a better income. Obviously if you’re buying for your offspring then you may not have much choice about where they go – which will depend on their results and course choices, amongst other factors.

According to the property website, towns with the highest yields include Coventry (7%), Teesside (6.9%), Chester (6.8%) and Edinburgh (6.5%). Our own university town of Canterbury offers a yield of just 4.7%, ranking 38th in their tables.

The amount of income you get from the property will also depend on factors such as the area it’s in – that old mantra of ‘location, location, location’ is just as important for student lets as for any other kind of buy-to-let. Therefore, proximity to transport links, shops, and other amenities (including, of course, the campus itself) are all important considerations.

If the house you’re buying is going to be rented out to more than three students (which is very likely), then you’ll need to obtain a Houses in Multiple Occupation (HMO) licence. Your property will need to conform to certain standards regarding its state of repair, fire safety, power supplies and other considerations. In Medway, an HMO licence costs £927, although this does last for five years.

How ‘hands-on’ you want to be is an important consideration – are you prepared to come out at weekends to fix problems, are you any good at DIY, do you want to be bothered with the whole palava of advertising the property, conducting viewings, taking up references and so forth?

If the answer to any of the above is ‘no’, then consider using an agent. Of course this will add to your costs in the form of a management fee, however it will give you a certain peace of mind that any problems will be dealt with – the agents should have a good network of local tradespeople who can take care of any problems for you. Two of the most well-established agents in Canterbury are Caxtons ( and Amos Dawton Finn (

Finally, what about the reputation students have for partying, wild living, and not-so-great housekeeping skills? Although student lets do sometimes suffer a higher degree of ‘wear and tear’ than other properties, in general you shouldn’t worry too much because in most cases their parents will be acting as guarantors – and they will want their deposit back. An annual spruce-up will also go a long way to keeping the house in good shape. Remember to factor in this cost unless you plan to do it yourself.

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