The UK student property market is experiencing an unprecedented boom. As high demand is met with ever-increasing student population numbers across the country, there has never been a better time to become involved in what is proving to be a lucrative and long-term venture for buy to let investors.
The growth of the purpose-built student accommodation (PBSA) market has come at a time when the demands of the modern student, and what their buy to let investor landlords can offer them, has changed completely.
Even in very recent history, what students demand for their money might be alien and unrecognisable to older generations who studied at university. Long gone is the image of the ‘classic’ student home, replete with damp, rusty boilers, threadbare carpets and draughty windows. In its place is the very picture of modern comfort.
Students today look for their accommodation to provide them with a little more than all mod cons. High-speed broadband, on-site gyms, car parking spaces, privacy, security and stringent site management are high on the list of priorities. The rapid rise of international student numbers in the UK means that with more and more young people coming to the country from further afield, they do not want to be short changed on a property that may well be their home for at least three years.
One of the biggest driving forces behind the changing demands of student accommodation developments is the proliferation of overseas non-EU students. By 2016/17, just under 308,000 students had come from countries outside the European Union. Young people moving vast distances across the world to study in the UK will of course want to make their living arrangements as comfortable as possible.
Leading property firms such as RW Invest find their high end, luxury student accommodation developments to be the subject of increased demand from investors who are savvy to the potential of student property.
In parts of the country such as Liverpool and Manchester, investors will discover that with an outlay of 70% less than they would be expected to put down in London, incredible returns and rental yields can be gleaned from the market.
A large percentage of students in the UK from non-EU countries may well be more affluent than their domestic contemporaries and will seek accommodation at the higher end of the market. Non-EU students will also seek longer term stays, the hassle involved in packing up and leaving the country in between terms and academic years proving too costly and stressful for all involved.
With the universities finding themselves unable to afford such amenities and luxuries for their own student dormitories and shared spaces, the gap in the market has been quickly filled by the private sector. It really is a buyers’ market, and developers and property investors are in prime position to take advantage of public sector indecision.
In the same year the overall investment volume in student property rose to £4.5bn; an increase of 23% on 2015. The following year saw an even bigger rise still. Investment in student properties and developments in the UK hit £5.6bn. The demand for high end luxury student property shows no sign of abating. Overseas investors almost doubled their market share in UK student property from 35% to 64% from 2016 into 2017.