If you’re weighing up your investment options and struggling to decide between a residential or student property venture, here are 5 reasons why you should consider the student accommodation market:
1. A Rich Market
The purpose-built student property market makes up a whopping £46 billion of the UK economy. The sector’s bold prominence is encouraging more investors to take the plunge and get involved. With rents on the up, the year of 2017/2018 recorded a rental growth rate of 2.55% – generating lucrative opportunities that are set to keep increasing in value.
2. Growing Student Population Demand
In 2017, there were a total of 2.32 million students attending higher education institutes, with nearly half of all young people now opting for university study or some form of advanced course. To break down this figure further, statistics by Universities UK highlight the fact that 1.87 million of these students are from the UK, whilst over 440,000 are from international countries.
Access to university has been made easier in the UK with the availability of student loans, and tougher job prospects mean that domestic students are choosing to gain superior qualifications before launching into careers.
A rise in students from countries outside of the UK is also helping to add to the increased higher-education population. A larger proportion of overseas students taking up courses in the UK are from non-EU countries, illuminating the surging influx of Asian undergraduates year on year. In fact, Chinese students exceed all other foreign nationalities when it comes to making up student numbers, with nearly a third of non-EU students coming from China.
3. Undersupply of PBSA
It’s surprising to learn that only 26% of modern students have access to adequate student accommodation and student furniture. There is simply not enough purpose-built student accommodation (PBSA) available to house the UK’s staggering increase in higher education participants. Students are forced to reside in poor-quality halls and shared houses that offer few luxuries and facilities.
As the demographic continues to change, what students want out of their accommodation is also adapting. Modern university goers are ditching the grungy student lifestyle for more inclusive developments with spacious and stylish rooms accompanied by a range of facilities.
The lack of PBSA means that what’s currently on the market is snapped up by renters immediately, assuring peace of mind when it comes to tenant demand.
4. Amazing Rental Returns
Student property is renowned for its ability to produce impressive rental yields. Returns can be assured up to 8% in some of the best developments. This has risen in line with rising rental fees, driven by the imbalance amongst supply and demand for this specialist type of student living.
To get the highest possible rental yields for student accommodation however, you must consider the location where you are buying. Large cities with high university presence, regeneration and an established student culture are key.
5. No Hassle Investment
The great thing about student property is that after investing, there’s not much more that you need to do apart from sit back and enjoy the excellent annual yields. Onsite management companies oversee everything at the development from satisfying tenants to maintaining the building. Their experienced and around the clock service allows investors to enter into this profitable property sector with the littlest fuss and hassle.
For more information on buy to let investment opportunities in 2018, contact RWinvest on Tel: +44 (0)151 808 1250, via Email: info@rw-invest.com or visit the website at: https://www.rw-invest.com.
