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Insight & Opinion

Invest in student property in 2017

Author: Gemma





New student housing investment infographic

student housing investment

Student housing investments are one of the UK’s best performing asset classes and the market is now worth £43 billion.

Knight Frank have described it as ‘one of the few sectors in the property world that have delivered consistent rental growth every year since the economic downturn.’

But what makes student property an attractive income generating investment?

Student housing investment boom

The UK is a sought-after location for higher education and is home to some of the highest ranked universities in the world.

71 UK institutions are ranked in the latest QS World University Rankings 2016-2017, with 4 ranked in the world’s top 10.

According to Universities UK, there are 2.27 million students studying in Britain. With only 24% of students housed in purpose-built properties, industry experts believe that the UK’s student housing investment market still has room to grow.

Student property becomes a global asset class

It is not just the UK that has experienced an influx of investment. In fact, the sector’s popularity has increased across the world and is now considered a global asset.

Over the last 18 months, 40% of global student property transactions have been carried out cross-border.

$15 billion was invested globally in student housing investments in 2015 according to Savills, and investment levels have remained strong in 2016.

With $6.5 billion invested in the first 9 months of 2016 in the UK alone, Britain has emerged as a popular choice for buyers.

Brexit and student numbers

Despite Brexit, the asset class remains a top choice and it is thought that overseas students will flock to the UK, considering favourable exchange rates currently on offer.

Even with uncertain times ahead of the country, just 6% of the total number of students are from the EU.

“We are currently seeing good levels of investment demand following the referendum and, generally, transactions we are working on have seen little impact as a result of the Brexit vote,” Huw Forrest, director of JLL’s student housing team recently commented.

What will 2017 hold for the market?

With an increased level of investor demand over the last 18 months, there are no signs that investor sentiment towards student housing investments will slow down any time soon.

High occupancy rates in key locations will continue to underpin investor returns and, with student numbers continuing to rise, there is ample scope for rising rental returns.

Student property as an appealing armchair investment. Student housing investment opportunities are typically fully managed and offer investors a fixed return for a pre-determined period.

In a time of uncertainty and Brexit just around the corner, many investors have flocked to the sector to secure returns from a proven asset class, that has outperformed other sectors in times of economic downturn.

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