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Student accommodation

Is student accommodation a smart property investment?

Author: Gemma

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Whether you are looking to generate an income or want strong capital growth potential, when investing your hard earned cash you want to embark on a smart property investment.

Over the past few years, the student property sector has experienced a flurry of investment, but is it a good option for investors?

So far, so good…

According to Jones Lang LaSalle, investment in UK student property in 2014 will surpass £2 billion. This would mark the third consecutive year where investment in the sector has been in excess of £2 billion.

JLL states that rising land values in key locations – up to 25% year-on-year increase in some areas – and rising yields are reasons why more investors are turning to the student sector.

In recent years, the sector has performed well and despite the economic downturn, student accommodation proved good value for investors, even when student numbers declined after the rise in tuition fees.

“Student accommodation is a national success story for property, as significant funds have been invested not just in London, but in towns and cities across the UK,” Jo Winchester, head of student advisory at CBRE recently commented.

Property experts Knight Frank has reported that student property has been the UK’s best performing property market since 2011. This sentiment has been backed by Savills, who has stated that student housing is one of the UK’s most stable property investments.

Student accommodation is not without its flaws and investors should think about the location of their investment carefully, considering the number of available rooms, proximity to multiple universities and demand for places on university courses.

Today’s student housing market

With a record number of over 500,000 places allocated for the 2014-2015 student intake (UCAS), a 7% increase in applications from overseas students (Home Office, 2014), and an overall 3% increase in student numbers (UCAS), now is a great time for investors to enter this flourishing property market.

Many universities cannot provide accommodation for all of their first year students and, with rising student numbers, the shortfall will continue to grow.

Since the tuition fee rise was introduced in 2012, students are increasing looking for better quality courses and accommodation. This coupled with the fact that Universities understand that good quality accommodation will help them compete on a global level, makes investment in the sector a must for the future growth of the UK’s higher education system.

The development of brand new, purpose-build accommodation allows investors to benefit from putting their money into passive investments, enabling them to purchase fully managed properties with assured returns for a predetermined number of years.

What the experts think…

With 4 years’ experience selling UK student accommodation investments, London-based property agent, Experience Invest is one of the leading agents for this type of investment. With many developments running at 100% occupancy and paying returns, Experience Invest has a positive view on the market.

“The UK student property market is now a well-established buy-to-let sector and provides investors with a passive income stream with typical rental yields higher than more traditional assets. Despite the rise in tuition fees, student numbers are on the up, creating a solid and sustainable demand with high occupancy rates and minimal void periods,” Dale Anderson, project manager at Experience Invest commented.

“Our latest purpose-build development, Queensland Place, is a smart property investment which provides a fully managed approach to investing and a 10% NET per annum rental assurance is in place for 5 years,” Anderson added.

Queensland Place launched!

Located 0.3 miles from the University of Liverpool and with 4 other higher education institutions less than 1 mile away, Queensland Place is in a prime location for accommodation of this type.

The new build development is perfectly positioned to answer to the demand for student property in Liverpool and will feature a range of modern facilities including a gym, a cinema room, 24/7 CCTV, Wi-Fi, onsite laundry and more.

With over 50,000 students studying in the city, Liverpool is one of the UK’s top University Cities and is a proven market for student accommodation. The development will attract students studying in the city’s best Universities and its amenities will cater to students who wish to stay in a modern, communal environment.

Exclusive to Experience Invest, en-suite rooms within Queensland Place are available for £49,950 and will provide investors with 10% NET p.a. assured for 5 years. 4% interest is paid on deposited funds and a payment plan is spread over the duration of the build.

Student property in the right location such as Queensland Place is a smart property investment for those who are looking to invest for an income.

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