There’s little doubt that over the past few years, student property has had a quite sensational ascension from niche asset class to one of the premier performers for investors of all sizes from all over the world. In the space of just a few years, we saw the sector go from strength to strength, eventually bringing in almost £6 billion per year from buyers.
And it’s a trend that’s not over yet. According to predictions from Savills, even following on from the best three years in history for student property investment, those on both the domestic and overseas front are not finished quite yet. In 2017, it’s expected that the spend on student property will rise by another 17 per cent as investors continue to see the value it offers.
So why does student property remain such a hugely popular asset class at Cityscape Global 2017? Here, the Experience Invest team takes a look at some of the reasons why overseas investors are attracted to the UK’s student property market at this year’s show.
The UK is popular
Not only is the UK a popular place for property investment – and it has been for decades since first becoming a safe haven – but its education system is also highly sought after. Every year, large numbers of students come from all over the world to study here because of the fantastic reputation universities have, be they in Cambridge, Oxford, Edinburgh, Manchester or Liverpool.
The reasons for students to come to the UK from overseas are plentiful, from the fact that four of the top six universities in the world are here, to the fact that there are fantastic research opportunities and high satisfaction rates (93 per cent are happy with the teaching they receive in the UK, according to the Department of Business, Innovation and Skills).
And with predictions showing that the UK could grow its number of international students to as many as 600,000 by the end of 2020 (from around 480,000 at present) it seems that there’s no stopping the sector from growing. The demand that this causes for property is one of the continued reasons that investors spend big on student accommodation.
Student lets have traditionally been sub-standard. For decades, the UK property market was littered with dirty house shares and small, cramped flats that students would live in after they moved off campus. But this has changed, and the demand for better accommodation for students is creating new opportunities for investors to get in on something big.
Purpose Built Student Accommodation is big business in the current market, so it’s no surprise that investors are spending a lot of money on it. The sector is set up to specifically construct properties that meet the needs of students, mixing private and collaborative spaces and giving them somewhere to socialise, as well as live and study.
This is revolutionising the student accommodation sector, and as a growing number of students continue to demand such quality and benefits from the places they live, it’s little surprise that investors continue to want to buy into something so exciting.
Another real benefit of investing in Purpose Built Student Accommodation is that it gives buyers the chance to purchase relatively cheap while bringing in strong returns. This is always going to be a positive, particularly for overseas buyers who want that degree of security in their purchase.
Investors can now often purchase homes in this sector for less than market value, because they buy off-plan. And because they do this, they can also secure their guaranteed returns for a set number of years, which gives them that security, and allows them to forecast more accurately, giving them peace of mind that their income will be strong for some time.
Such perks are just another reason that student property makes sense as an asset class, and why so many people from across the world are making it part of their investment strategy.
How to invest in UK student property
Aura Student Liverpool is located in Liverpool’s Knowledge Quarter and, upon completion, it will emerge as the closest new-build development to the prestigious University of Liverpool.
Investors will secure 8.5% NET rental return per year for an assured 5-year period. Fully managed by a leading management company, investors who purchase an en-suite or studio apartment within Aura will secure a passive income from the UK’s no.1 ranked asset class.
Contact Experience Invest today to find out more about why now is the time to invest in UK student property.
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