Five Reasons to Invest in Student Property

Five Reasons to Invest in Student Property

Nov 27, 2018, 2:21:17 PM News

Student property is an asset class that has been steadily growing in popularity with investors. The Purpose Built Student Accommodation (PBSA sector) has remained one of the most robust asset classes, with investment in student property reaching £5.3 billion by 2017, a 17% increase on the previous year. There are a number of reasons why student property investment is a profitable strategy - here are the top five.

International Appeal

The UK has a stellar reputation for education, with the best two universities in the world in 2018 – Oxford and Cambridge - found in England. This means that not only do students in the UK choose to stay and study here, international students are coming in ever increasing numbers. A British education is a prestigious asset around the world and parents and students are willing to invest a great deal into it. These international students often have much higher expectations from their living arrangements which has led to demand for higher quality accommodation. Because of this boom in international students, we have also seen a boom in international investment in student property, with investors from around the world capitalising on this new opportunity.

Low Cost Investment

Student property is especially attractive to investors because of its low entry cost. For first time investors or those looking to diversify their portfolio it can be easy and affordable to invest in student property. Student properties can be purchased for less than £50,000 which is far cheaper than most other investment properties on the market. This doesn’t just have to be student houses in rough areas, many new student properties are stylish one bedroom or studio apartments in enviable city centre locations.

Impressive Rental Yields

Due to rising rents across the board, student property offers lucrative rental yields. Property investment companies like RW Invest which offer student accommodation investment opportunities often offer guaranteed yields of up to 8%, compared to the UK average of 5%. Compared to other types of property investment, this is a great return on investment. The increasing demand for PBSA has led to significant rent increases which are providing investors with higher yields too.

Higher Quality Accommodation

There has been a huge shift in the student property market, with high end studio apartments and luxury studios proving more popular than ever before. If students are willing to invest such a large amount in their education, they are often happy to spend a little extra for a comfortable living solution. Privacy, modern features and central locations are all increasingly high on the list of students looking for property. This is good news for investors as they own property which is more valuable and better looked after than traditional student housing.

Guaranteed Demand

The UK is experiencing increases in student numbers year on year, with 2.32 million students studying at UK universities in 2016-17. The cap on the number of students that a higher education institution can accept has also been lifted, allowing universities to recruit more students than ever. These high student numbers naturally lead to a high demand for student accommodation. Demand for student property is high, with many PBSA developments boasting 100% occupancy and reduced void periods. In many UK university towns there is far too little student accommodation available, with 2-3 students for every 1 bed space a common issue.

Published by Samantha Brown

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