Landlords with student properties in smaller university towns or cities typically generate the best yields, according to data from Paragon Bank.

Single university locations “fare particularly well”, the challenger bank says, with seven of the top 10 locations for student yield only boasting one main university.

Student populations in these areas are also typically smaller at less than 25,000, its ‘Studying student buy-to-let’ report adds.

Swansea was the top location for rental yield based on application data over the past two years, with the average rental income of £22,140 generating a yield of 9.56% against the average purchase price of £231,534.

The city is served by one main university, Swansea University, which has 20,375 students.

Hull came second in terms of yields, with the average student property in the city generating a return of 8.68%.

Again, the location only hosts one main university, the University of Hull, with 14,255 students.

The survey found that out of the top 10 locations for student property yields, only Liverpool, Coventry and Leeds have more than one university.

Other bases inside the top 10 include Chester, Stoke-on-Trent, Lincoln and Preston.

Paragon Bank managing director for mortgages, Richard Rowntree says: “When it comes to student property investment, heading to the major cities doesn’t always generate the best returns, as these figures demonstrate.

“Smaller towns and cities will typically have a lower proportion of purpose-built student accommodation, which has become more commonplace in major cities, whilst major cities also offer a wider array of property that students can rent, such as city centre apartments or build-to-rent schemes.

He adds: “Smaller locations will often offer more traditional type student accommodation, such as houses in multiple occupation, whilst property values are generally cheaper in these locations, which can help generate better returns.”