We now have available opportunities in a number of locations around the UK. I believe there are a number of sound investment reasons for this and therefore felt that in this month’s article I would share with you what is leading to the upsurge over the last couple of years in this type of investment opportunity.
The student rental market is something not many people think of when talking about property investment. However, with low entry points and guaranteed high returns, purchasing a student let can be the way forward for landlords looking for a good cash investment or as part of their pen- sion package. They also make very attractive inheritance gifts as the purchase price is set by the return the investment generates. In other words, your income is less speculative than a traditional ‘buy to let’ investment and is also insulated against the volatility of the housing market.
Blocks of student flats provide the students of city universities a top quality facility. They are often complete with gymnasiums, entertainment rooms and 24 hour CCTV.
Therefore it is no surprise that there is a high demand coming from foreign students who are will- ing to pay the price for this type of bespoke accommodation. Best of all, these apartments normally come as an ‘armchair’ product, with many of the developments housing their own concierge service.
The yields are very attractive and often guaranteed for the first year. Major investment developers such as Fortis certainly seem to have created a niche product for themselves which has had an effect on more traditional student landlords.
Landlords were renting out ‘buy to let’ properties as a house of multiple occupation (i.e. on a room by room basis). The student tenant definitely seems to have become more discerning, and favours this new style of customised accommodation, and is prepared to pay the higher rental rates to acquire the additional facilities which are now available with these specific student lets – or perhaps the bank of Mum and Dad are!!
Although there is currently no mature resale market as this is a relatively new concept, and for this reason finance is less readily available, this also seems to be changing with banks such as Shawbrook now looking to enter this market as they can see the potential which will only help the investor. Therefore with less speculative growth, student property investment is a good income generator both for current or prospective landlords. ⌂
Please feel free to contact us should you require more information.