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How Thriving is the Student Property Investment Market?

How Thriving is the Student Property Investment Market?

Student accommodation has long been considered one of the UK’s top performing asset classes. Over recent years, investors have observed the changes and are increasingly entering the market because of its boundless potential. As more investors enter the sector, the student buy to let market has become more established as it has the ability to deliver a robust long-term income stream. High quality developments in prime locations across the UK, preferably in commutable distance to a university or bustling town centre, will help ensure longevity of investor returns. 

RW Invest property specialists based in Liverpool offer a diverse portfolio of student investment opportunities located in numerous hotspots with unparalleled potential for capital growth and maximum rental income. High occupancy rates associated within the student sector assume that rental returns will increase over time and rising returns will help investors resell their units at a higher price with ample scope for yield compression. 

Student property is considered a global powerhouse and around 2.3 million students are enrolled in higher education in the UK, with the number of international students increasing by 5% over the last 10 years. UK purpose-built student accommodation (PBSA) remains highly attractive to international investment as the fall in value of the sterling following Brexit creates a lucrative buying opportunity. However, political uncertainty has failed to derail student property as it continues to become one of the most prosperous asset classes in the world, according to Savills World Student Housing report

One of the most notable reasons investment has strengthened in the UK private rented sector is the rise of the purpose-built student accommodation market. As student demands continue to change, the private rental sector has been increasingly tasked with meeting soaring demands.

PBSA has reacted well to the changes in the market and have worked tirelessly to cater for the needs and desires of students to make them a favourable option. Private rooms with communal spaces, rooftop terraces, onsite gyms and an all-inclusive payment model which includes bills, are all drivers of demand in student housing, and when traditional accommodation fails to tick all the boxes and runs the risk of becoming obsolete, it is down to private investors to fill in the gaps. 

Student property has experienced a dramatic ascension from a niche asset class to one of the top performers for investors around the globe. As the sector has strengthened, eventually bringing in almost £6 billion per year from buyers with predications estimating that last year’s figure alone would rise by 17% as investors continue to recognise its potential. 

When considering a student accommodation project, it is essential to become mindful of the size of the student body attending the higher education establishment in the city, as it is essential to have a shortfall between the number of students and the supply of beds provided by private landlords or the university. A shortage in supply will ensure higher occupancy levels and will aid the safeguarding of yields and help to secure long term healthy investments. 

One observation to consider would be the Universities forecasted intake or plans for expansion, this will serve as a good outline for the anticipated influx of students. A university with new facilities in the pipeline will have expansion at the forefront of their vision and therefore the demand for student accommodation will be greater. 

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