This article first appeared on the website on 22nd June 2016

A new report from The Mistoria Group has revealed that investor demand for student and professional HMOs in Liverpool has risen by 45% year on year, thanks to excellent yields in the City.

The Mistoria Group, which has an office in Liverpool, has also seen a rise in tenant demand for high quality shared accommodation, up by 42% year on year.

Average annual returns between 2010 and 2015, place Liverpool and Salford at the top for rental yields. Liverpool sits at no 2 position, with average annual rental yields over five years of 7.45% in Liverpool. Although London is very popular for landlords, the North West has been the most lucrative area for average annual rental yields over the past five years.

Savills research also shows that the five largest rental markets outside London are Liverpool, Salford, Leeds, Bristol and Birmingham — all popular university cities, where an average of 23% of the population live in the private rented sector.

According to The Mistoria Group, property investors looking to invest in the buy-to-let market should look to university towns in the North West to find the best returns.

Mish Liyanage, Managing Director of The Mistoria Group comments: “Investors will find the best returns in urban areas like Liverpool, with a concentration of students and young professionals. Yields in houses of multiple occupation (HMOs) can be high.

In Liverpool, the average price for a four bedroomed HMO is £150,000 and cash yields are up to 13% – 8% rental yield and 5% capital appreciation. If investors want to target the student or young professionals market in Liverpool, they should buy a multiple-bedroom property within 30 minutes’ walk to the university or City Centre. Students and young professionals are looking for high spec accommodation with good appliances and a quality finish, that have good transport links nearby, such as train stations and main roads.

We saw seen a big spike in demand before the new stamp duty changes kicked in on second homes in April. Since then, demand has remained strong. Our office has seen investor enquiries for armchair services rise by 29% year on year, along with enquiries for refurbishment for HMO conversions up by 43% year on year. We currently have 80 properties under management and are planning to increase the portfolio to 200 in Liverpool in the next two years.”