Landlord News

Investment in student housing rises

Em Morley - October 21, 2015

New figures suggest that investment in the British student housing market rose sharply in the first half of this year.

Data from The Mistoria Group, a leading student property investment firm, reports that investment in this sector hit £3.98bn earlier this year, well more than the £2.35bn recorded in the whole of 2014.[1]

Increases

In the first half of 2015, London saw a new record-high of £1.98bn of transactions. This was a reflection of the number of investors buying into the potential yields of a well-maintained student home, as opposed to buy-to-let or commercial property.

Investment in the student sector in the North West has risen by 66% over the last 12 months, with the South East (65%) also showing considerable improvements.

Mish Liyanage, Managing Director of the The Mistoria Group, noted, ‘in some parts of the UK, student housing is limited in numbers and of poor quality, with only student pools and tatty HMOs available.’[1]

Investment in student housing rises

Investment in student housing rises

Opportunity

Liyanage believes that, ‘investors have a great opportunity to invest in Universtiy towns where there is short supply of quality, affordable student property. We have seen some investors divert a significant amount of their funds from traditional buy-to-let student property. For as little as £150,000, an investor can buy a four bed HMO in the North West, in a good location for students and professionals, fully refurbished, furnished and tenanted for the coming year.’[1]

‘A key driver for the rise in demand for HMO student property is down to the huge growth in student numbers over the last few years,’ Liyanage continued. ‘According to UCAS, the number of university applicants has reached a record high, as demand for higher education courses continues to rise. Figures published earlier this month reveal that overall there has been a three per cent increase in the number of applications, compared with the same point last year, he added.[1]

Concluding, Mr Liyanage said, ‘Investing in student accommodation offers an excellent long-term investment option.  Typical rents are significantly higher for student properties, than a comparable buy-to-let property in the same city and student property is highly likely to be in constant demand throughout the calendar year.’[1]

[1] http://www.propertyreporter.co.uk/landlords/student-housing-market-hits-%C3%A3%C2%A2398bn.html