A world leading real estate advisor has reported that £863m was invested into student accommodation in 2011.
The figure, released by CBRE, signifies an increase in the market, from £770m invested in 2010. This was up by a huge 220% invested in student property from 2009.
The high demand for student accommodation between property investors has been pushed by a low supply and high rental returns compared to standard UK property.
Jennet Siebrits, Head of Residential Research at CBRE, says: “Student accommodation is more attractive than many other asset classes in the current climate, and we have seen increasing interest from relatively new parties seeking to diversify their portfolios.”1
New financiers to the market include a rising number of overseas investors who view the UK as a safe and stable market place, where student accommodation can be bought for as little as £50,000, with possible net rental yields between 7-9%.
The study also presented that student accommodation brings high occupancy rates, with the current UK figure at 99%. This highlights a strong demand for student housing, and has caused annual student rents to increase by 4% across the country, and 5% in London.
Valued industry expert, Knight Frank, have also reported the changes in the student accommodation market. The growing numbers of overseas students, mature students, and wealthy students, have been acknowledged as the need for higher quality housing, creating a stronger tier in the market over the next few years.