Just 17 percent said they’re aware that investing in student property can result in a high yield (see video below)
In the first half of 2015, £3.8 billion was invested in student property in the UK and it’s predicted that this will rise to £5.7 billion by the end of the year – nearly equal to the last three years combined.
As the market goes from strength to strength, the demand for growth continues to increase. There are rising numbers of UK students, and figures are predicted to double in the next decade. A huge number of international students are also attracted to our educational system; 18 percent of the UK student population are international and a 50 percent growth has been seen over the last 10 years.
The standard of living in student property has in turn increased to meet the needs of the students, and with it changed the perception that the public have of ‘student digs’. A new report that sampled 2,000 UK adults is being released by the specialist property company Experience Invest. The findings suggest as few as 13 percent would consider halls of residence to be out of date and in need of repair.
However the public remain unaware of this blossoming investment sector, as just 17 percent of respondents said they’re aware that investing in student property can result in a high yield. Dale Anderson, Project Manager of Experience Invest has pulled together the facts for both experienced investors and the general public – here are the top 5 reasons student housing has propelled into the mainstream:
1. High yields
Depending on the location of the project, investors can generate between 8% and 10% NET per annum from a student property investment. Much higher than the average 5% generated from traditional buy-to-let property.
2. Managed and Maintained
Student property investments are typically fully managed and maintained by a specialist property management company who will have links to the local University. Investors can receive passive returns from an asset which is professionally managed and maintained.
3. Demand in market
Rising student numbers means there is a strong demand from rooms in key University towns and cities. The demand for accommodation varies from location to location and investors should ensure there is a need for this type of investment before buying.
4. High standards of living
Tuition fee increases have made today’s student savvier when it comes to money. HMOs (House in Multiple Occupation) were once a popular choice for students however, there has been a shift towards purpose-built developments. Many students find this form of accommodation cheaper in the long run as all bills are included and they typically include free access to an on-site gym, cinema room and even TV rooms with built-in entertainment stations.
5. Anyone can invest
Traditionally, purpose-built student property was not available to the individual investor, however investor sentiment has shifted in recent years. Investing through a well-established agent such as Experience Invest will allow first-time investors to receive a passive income from what is considered the UK’s best performing asset class.