Investing in student property has probably become one of the most popular investment classes in the UK over recent years, and for good reason too.
With the number of students in the UK not just staying steady but actually rising, there is a constant and increasing number of opportunities to invest in student property in the UK all across the country.
It’s a different type of property investment to, for example, residential property due to the fact it offers better long-term income returns, but nonetheless, many investors and landlords are seeing it as the ideal way to diversify their portfolios or protect their wealth from inflation and economic volatility.
That volatility, it should be said, is expected to be short-term considering the current government are on shaky ground and needs to prove its economic credentials. Hence, the likelihood is that things will return to relative normal quite quickly.
Moving back to the property investment market and investor sentiment has remained buoyant despite some movement in the mortgage market. Let’s not forget those dire predictions from the pandemic which sought to predict a fast decline, but which saw the biggest growth in decades.
Student property is stable
To give a quick glimpse into the sheer size of the current market compared to even a few years ago, according to Ibis world, the UK market is currently worth $4 billion, with a massive 22.7% growth in the market in 2022 alone.
Further to this, research from property experts reveals that long-term investment is returning strong results.
For example, Savills stated in their latest report into the market “UK purpose-built student accommodation (PBSA) has continued to show that it is counter-cyclical, with growth in student numbers during a time of economic uncertainty. Domestic student demand is at an all-time high, but the supply of stock in the private rented sector (PRS), for example HMOs, is constrained and contracting. There is an opportunity for PBSA owners to meet that excess demand by providing a product at a price point that is attractive to domestic students. The latest UCAS application data shows continued growth in the number of domestic students and high-value international students.”
Is now the time to invest in student property?
Whether investing in student property is right for you will depend on your investment strategy and what you’re looking to achieve from your investments.
Student property tends to hold its value over the medium term, but it’s unlikely that it will rise significantly in value over a longer period.
Having said that, student property has extremely reliable tenancy rates because students tend to sign contracts at the beginning of the academic year in advance, and if you invest in the right areas then it’s very likely that you’ll have high demand.
A few years ago, the government decided to lift the cap on the number of students that they could accept and in some of the more popular areas such as Manchester, Glasgow, Nottingham and other student cities many are finding it difficult to find accommodation at all.
Further to reliable tenancy rates, the yields (the amount you can charge in rent monthly or yearly compared to the value of the property) tend to be higher than normal residential investments.
Finally, student property more often has a lower price of entry into the market meaning it’s more accessible.
Invest with Knight Knox
If you’re interested in student property investment, why not contact us today?
Our track record speaks for itself. We have launched over 100 developments with a total value of over £1.2 billion, over 90 of which are now completed and tenanted.