UK Student accommodation has always been one of Emerging Developments primary recommendations to any investor. Our reasoning for this is quite simple: it's a low risk, high yielding and totally hands-off investment and our clients have profited hugely over the last three years in this sector.
Despite the rising tuition fees, more young people than ever are choosing to go to university, rather than head straight into work. According to the University and College Admissions Service (UCAS), 592,290 students applied for university in 2015 – a record high. This is great news for anyone who is thinking about investing in student property, as it’s likely that students will be fighting to live in your accommodation.
Demand is vital in the success of any investment, but why else should you invest in student accommodation?
Universities are struggling to keep up with housing demands.
Student numbers are soaring – the population of non-EU students in particular is set to rise rapidly over the next ten years, research from JLL states. Universities can’t build accommodation fast enough; at many institutions, students are only allowed to stay in 'halls' (purpose-built student housing) for their first year and even then, not all students get in. Once they reach their second year, students must decide which friends they are going to live with and rent a privately-owned property together.
Student accommodation is one of the strongest performing asset classes in the UK
During the recession, many asset classes performed badly, but not student accommodation. People were still going to university and therefore the sector continued to perform well. This is because it’s in constant demand, so the income stream is more predictable than some other investments.
Student accommodation also tends to perform better than traditional buy-to-let properties. Investors can expect a minimum annual yield of between eight and ten per cent in some areas, whereas traditional buy-to-lets tend to net around five - six per cent a year.
The number of years it takes for a student to complete their course varies from subject to subject, as well as what qualification they are taking. However, they will likely stay at university for a few years – medical students will be in further education for around six years! Potentially, they could stay in your property for their entire duration at university, which means secure, guaranteed rents.
There are many benefits to investing in student property, but it’s important to do your research first. No investment should be rushed into, and there will always be risks to consider, so take some time to decide if they are ideal for you.
See all our Student Accommodation Investments at http://www.emdps.com/#!student-accommodation/cc7