Property Investment Opportunities in the UK Student Rental Market

UK houses

It might not be a market youíd instantly give thought to when considering property investment but thereís a lot going for the UK student rental market right now. A quick look into the numbers and youíll see that investors have been getting ever more engaged in the market over the past few years with the penny dropping that itís an environment ripe for healthy growth.

Record Investment Levels

2015 saw record levels of investment into the UK student rental market with some significant amounts of money, in excess of £4 billion, coming in from both high-end investors from the UK as well as overseas.

The reason?

Quite simply, student accommodation represents some of the best opportunities for strong returns on investment anywhere in the UK property market in the current climate.

Indeed, the UK rental market as a whole has enjoyed a period of buoyancy in the post-recession years but itís towards student accommodation where many are finding the key areas of action.

So, the obvious question: why is this the case?

Increasingly Growing Demand

Demand for student accommodation in the UK has never been higher. Figures show that year on year the number of 18-20 year olds heading into Higher Education is increasing, a trend set to continue into the next decade. And as trends in how students accommodate themselves have shifted (more of which below), so the demand for modern accommodation has risen in accordance.

Adding to this ever higher demand is the greater influx of foreign students making their way to UK campuses in recent years. An overseas student is potentially lucrative for a University and most in the UK are actively looking to recruit healthy numbers to the fold. For the high quality and attractively located establishments in the big cities particularly this has meant a dramatic rise in the need for good quality accommodation.

Increased Demand on Living Standards

Which brings us to the other crucial component of this positive investment environment. Students of days gone by would have traditionally opted for older house-based accommodation, generally an inner city style house converted by private landlords to accommodate 4, 5, 6 or more students, often in basic lodgings with little in the way of modernity and home comforts.

Those days have gone.

The modern student is a lot more discerning about where he or she lives and will generally tend to arrive at University with an expectation of reasonably high quality living, replete with modern facilities essential to todayís environment ñ Wi-Fi, as an example.

Being a student is not a cheap deal anymore, with fees in the thousands per year. As such the student and their parents tend to expect higher standards of comfort. Take a look at the student apartment and housing facilities in London, Birmingham, Manchester and other major cities in the UK and you’ll find ultra-modern living quarters with good access to the city and the campus, and will usually have a raft of facilities and entertainment options on-site (be that a gym, cafÈ, satellite TV, powerful Wi-Fi and in some instances a cinema).

The combination of increased demand with higher expectations on standards has seen a major drive towards new student-oriented apartment blocks and dwellings from investors keen to tap into this lucrative market ñ with its steady stream of clients.

Conclusion

Real Estate and opportunities to invest in bricks and mortar have been considered a safe long-term bet for growth throughout time ñ even Lex Luther knew this in Superman. But different opportunities arise in different environments at different moments. For now, and into the foreseeable future, the student rental market in the major cities of the UK offers genuine potential to establish a regular income stream and some sustainable long-term yields to those who do their research and invest wisely.

 

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