Student landlords profit from accommodation shortage
Student letting is booming as a huge demand for rooms outstrips the supply in many towns and cities.
In the current academic year, 2.4 million students enrolled in universities through UCAS, the clearing house that handles student applications for higher education – a 34% increase over 10 ten years.
Demand has pushed up rents and fewer voids giving a gross return on investment of 7% – 10% depending where in the UK a student house is run, according to property firm Assetz.
Benefits of investing in the student property include:
- Rents are often higher for student properties than a comparable buy-to-let in the same city.
- Student numbers are set to continue to rise in coming years – especially in London, Manchester, Leeds and Sheffield.
- Property is let for is tenanted for almost all of the year and landlords know seven months in advance if a property is prelet for the next academic year.
Stuart Law, Assetz chief executive, said: “Student property can be a low risk, high yielding and hands-off investment, making it ideal for those who are looking for a safe home for their hard-earned cash.
“The surge in demand for university places and shortage of supply of properties is generating superb opportunities for professional property investors who can purchase apartments in private university halls of residence, or invest in traditional shared student houses.
“With even more people now opting to go to university, in a bid to both improve their long term job prospects and delay starting their career until the economy recovers, the potential returns for student property investors are set to rise further.
“Despite the potential funding shortfall from the Government, demand for student property will continue to be high from overseas students who are able to pay full fees. International students are less price-conscious but looking for fully managed private halls of residence so there remains high demand from this sector. Investors have the choice of traditional houses or apartments or can choose the hands-off convenience of specialist student flats in fully managed private halls.”
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Filed under: Buy-to-Let Market, Student Accommodation, Student Halls