Investment in student property has been hailed as one of the crowning glories of the sector this year, with record levels already reached according to recent reports. And now, a new study from CBRE has stated that investment levels in student units is already nearly double that seen in the whole of last year in the space of just six months.
In its latest paper, CBRE looked at the amount of money spent in the January to June period for this year, and said that in that six-month period, some £3.98 billion of money was spent on student property.
This is already almost twice as much as was spent in the whole of 2014, when investors bought some £2.9 billion of student housing stock. CBRE said that the reason for this, and the reason that it is likely to continue moving forward, is that there is a lack of housing stock in relation to demand, as well as the fact that student numbers continue to grow in the UK.
“So long as demand outstrips supply, upward pressure on both rents and capital values will continue to make the market an attractive proposition for investors, and we don’t expect the market to come off the boil for some time,” said Jo Winchester, head of student housing advisory at CBRE.
She also went on to add that the fact student property offers an alternative route into the private rental sector is a reason for people investing more into the sector. It generally offers higher yields for a lower relative price than traditional residential stock, so becomes very popular with buyers.
“Although there are differences between residential and student accommodation operational models, some larger student housing operators and investors in the sector are beginning to explore build to let development and investing in the private rented sector. As this happens, it is possible that the operational models could become more closely aligned,” Ms Winchester said.