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Student accommodation

Why Stoke is a city with a lot to offer student property investors

Author: Gemma

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Stoke-on-Trent, with Staffordshire University close by, could be a good target for UK student accommodation investors looking to secure returns from this exciting asset class.

For investors looking for opportunities in the UK property market in recent years, one of the most appealing and potentially profitable asset classes has been purpose-built student accommodation (PBSA).

This sector has proven particularly attractive owing to factors such as:

  • Higher-than-average rental yields
  • Steady tenant demand thanks to the global appeal of UK higher education
  • Relatively low entry prices
  • A reliable passive income stream

There are many towns and cities across the UK that have attracted a lot of interest from student accommodation investors – Liverpool and Manchester, for example.

Another location that has a lot to offer is Stoke-on-Trent. This city in the West Midlands is home to Staffordshire University, which secured a gold award in the 2019 Teaching Excellence Framework, showing its high standards of learning and education.

The university

Staffordshire University is a digitally-led institution that provides undergraduate and postgraduate education across a range of subject areas, including computing, design, law, business and engineering. The university also provides healthcare education at specialist centres of excellence in Stafford and Shrewsbury. A global network of more than 20,000 people study its degrees internationally.

There have been some positive headlines for Staffordshire Uni recently, including the news that some of its computer games courses have been recognised for excellence by the games industry. The accreditation by trade association TIGA reflected a number of key factors, including the high percentage of graduates who find work in the games industry or related sectors.

Meanwhile, Staffordshire University film lecturer Dr Agata Lulkowska recently received the annual International Award for Excellence from the Journal of Communication and Media Studies.

Looking to the future, the university has invested more than £100 million in new buildings and facilities in recent years, with the new £40 million Catalyst building due to open in 2021.

These positive signs of the high educational standards at Staffordshire Uni are likely to provide encouragement for investors who want to feel reassured that student accommodation in Stoke will attract strong demand from tenants.

Student life in Stoke

The general lifestyle benefits and appeal of a city to the student population are also important considerations for investors, since they provide another indication of how much interest tenants could show in local accommodation.

Stoke-on-Trent is home to plenty of bars and music venues that provide regular night-time entertainment to the local student population, as well as restaurants, shops and a packed calendar of festivals, exhibitions and events.

People attending Staffordshire University can also venture beyond the city to explore some of the surrounding areas and attractions, such as the Peak District National Park, the Cannock Chase Area of Outstanding Natural Beauty and the Alton Towers and Drayton Manor theme parks.

The university’s Stoke campus is located just a short walk away from the train station, which offers quick and easy connections to major cities like Birmingham, Liverpool and Manchester.

Student demand still strong

In addition to the high standards of Staffordshire University and the appeal of the city itself, investors looking at student accommodation in Stoke can take confidence from the fact that the PBSA sector as a whole offers excellent prospects for regular rental yields and long-term investment returns.

The UK is recognised on the global stage as a world-leading centre of higher education. Its prestigious universities attract applicants from far and wide, meaning the student property market sees a steady flow of demand for comfortable, well-equipped living space close to campuses.

Real estate services firm JLL has predicted that the number of full-time students in the UK will increase by 500,000 over the next ten years.

It goes without saying that the Covid-19 pandemic has impacted the market, but there have also been some encouraging indications that the crisis has not dampened people’s desire to pursue higher education in the UK.

The latest figures from the Universities and Colleges Admissions Service (UCAS) showed that there were 514,020 applications by the June 30th 2020 deadline for places on undergraduate courses due to start this autumn – 1.6% more than a year earlier.

UCAS chief executive Clare Marchant said: “Universities and colleges are setting out their ambitions to welcome students to their campuses this autumn, with many planning to blend high-quality online learning with face-to-face teaching and support.

“Confidence is building for an autumn term that safely captures the essence of the academic year’s traditional start as much as possible.”

In light of the social distancing guidelines that remain in force to limit the spread of the virus, properties offering students their own self-contained living space could be viewed as a safer option than university halls of residence.

One of the actions Staffordshire University is taking to keep students safe is limiting the number of flatmates sharing university-managed residences.

Introducing Poulson House

Students having access to their own private living space is one of the many benefits offered by PBSA.

Other common advantages include:

  • On-site leisure amenities like gyms and games areas
  • Manned reception desks
  • CCTV security
  • Dedicated study zones

Staffordshire University students can access these and other features at Poulson House, a collection of 122 self-contained studio apartments just a short walk away from the campus.

This property has been open for three years, during which time it has achieved an average occupancy rate of 87%. It also offers attractive financial benefits for investors, including 0% stamp duty and 7% net rental returns.

The fact that Poulson House is fully operational and ready to welcome tenants makes it an ideal option for investors who want to realise the huge potential of the UK student property market, without taking on any off-plan risk.

If you’re interested in finding out more about this and other student accommodation investment opportunities, contact Experience Invest today.

Give us a call on +44 (0)207 834 1113, or book a free consultation.

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