The Ultimate Guide to Student Property Investment

Comments Off on The Ultimate Guide to Student Property Investment

A student property investment in the UK is widely considered one of the safest investments you can make. There are over 2.3 million students in the UK across 131 universities, but there currently isn’t enough supply to meet demands. It is estimated that students outnumber PBSA units at a ratio of 3:1, meaning there is a huge undersupply for this type of student property.

The interest in this sector is staggering, and the UK is grateful for the input that comes from international investors. North American, Gulf Cooperation Council and Asian investors make up the bulk of investment in the UK PBSA market. Out of the £2.9 billion invested in UK PBSA in 2018, £1.68 billion came from overseas. Singapore Press Holdings (SPH) alone have a UK-based student property investment portfolio worth over £448 million.

The student market has a lot to offer investors due to the hands off nature of the investment. As the sector is one of our many key areas of interest, we put together this guide to help you understand more about the student property investment market.

What Types of Property are Available?types-of-student-property-low-angle-apartments

Historically, there were only two options available to students: Halls of Residence and Houses of Multiple Occupancy (HMOs). Neither of these options offered students the space or facilities that we see in Purpose Built Student Accommodation (PBSA) . In recent years, developers have been building accommodation with student health and wellbeing in mind.

The standard — dependent on budget — offers students fully self-contained studios or one-bed apartments, including a kitchen and bathroom while integrating technology to enhance student experience. Facilities on-site may also include social spaces such as cinemas, gymnasiums and study lounges.

Where are the Best Locations?student-property-investment-locations-london

Knowing the best cities to invest in is crucial to a successful student property investment. Many places in the UK are known for their prestigious universities and large student populations. Generally speaking, these are the areas you want to focus on. If you’re unfamiliar with the UK property market, it’s important to take the knowledge from experienced consultants to find the right location to invest in.

Take London as an example. It has more universities than any other city in the world and a student population of 400,000, which is the largest in the UK. It may seem as though London has all the makings of a great city to invest in, but the high cost of property and low rental yields make the region a less attractive proposition for investors in the student market.

The North of England and the Midlands, however, provide excellent alternatives to investing in London property and will be more in line with your expectations of high returns at attractive property prices, which we associate student property with. Take Newcastle-Under-Lyme for example. Studio prices start from a little as £69,999 and can offer up 10% Assured Net Rental Returns over a 3 year period.

Liverpool is another city that has proven popular with property investors. The region has over 70,000 students and has become very popular with international students over recent years. Investors in Liverpool are seeing rental returns as high as 10% in some developments. Property here costs a lot less than in the south of the country, ultimately giving investors a greater return on investment and excellent value for money.

Every city has something different to offer, which is why it is important to do your research. 

The Importance of International Students and Their Relativeschinese-students-learning

The international student market is integral to this sector as 23% of the UK’s student population comes from overseas. There are over 100,000 Chinese students in the UK alone, and there has been a 48% rise in EU students choosing to study in the UK. When investing in student property, it is important to keep these demographics in mind.

In many cases, international students do not pay for their own accommodation; it is a relative (usually a parent) who pays, so you need to make sure your property satisfies and gives the peace of mind they are looking for when sending their children to a different country to study.

Parents base their decision on four factors when choosing accommodation for their children. They are:

  • High quality living conditions
  • Safety & security
  • Value for money
  • A strong learning environment

By meeting these needs, you increase the chances of a parent agreeing for their child to be accommodated in your property.

However, you need to remember domestic students account for 40% of all residents in PBSA properties, so it is important not to overlook them.

As with international students, many parents will be helping domestic students pay for accommodation. Once the parent approves and the student moves in, you have to ensure the property meets their needs so they stay for the duration of their course.

What Do Students Want?group-of-students-doing-course-work

When considering a student  investment, you want to know why students will choose your accommodation over another. Students want more than the basics. They want convenience and modern luxury. The most successful student properties in the UK cater to these needs through:

  • On-site gyms
  • Communal areas & community activities
  • Outdoor space (such as a roof terrace)
  • High-speed internet
  • 24-hour security
  • Free bike hire and more

UCAS helps prospective students with their university applications in the UK. They conducted a survey that found students would be willing to pay an extra premium for these services.

As they are at university to study, students require access to libraries, collaborative working spaces and private study areas. This ensures they can get their work done to the best of their ability in the comfort of their own home.

How to Find a Student Property Investment Opportunity in the UK

It is not hard to find a student property investment in the UK, but finding one that will result in success is more of a challenge. At Treo Investments, we have the knowledge, experience and connections in the student market, which allows us to source the best performing developments for you.

We take the time to find out what it is you want from an investment, so you can be sure the opportunities we source will deliver, providing immediate rental returns from day one.

Get in touch with us today to find out how we can help you make the right investment.

Where to Buy Student Accommodation in the UK

Comments Off on Where to Buy Student Accommodation in the UK

Student accommodation in the UK is one of the fastest growing property markets and has emerged as one of the strongest performing asset classes over the last decade. Outside of North America, the UK has the largest purpose built student accommodation (PBSA) sector in the world, which is valued at £50 billion.

Even with the PBSA market in the UK being so buoyant, there aren’t enough properties available to meet demand. There are over 2.3 million students in the UK, but for every three students, there is only one PBSA room. Put simply, a lot more PBSA needs to be built in the UK, and there are plenty of opportunities for property investors.

When making a successful property investment, knowing where to buy student accommodation in the UK is the most important factor. Many cities in the UK are well known for their prestigious universities and large student populations, and these are the areas you want to invest in. It’s also estimated that around 60% of the international student market lives in a PBSA property for the duration of their course, so it’s important to look at university student demographics when choosing a property to invest in.

Below, we have highlighted four cities we believe have excellent potential if you are looking to buy student accommodation in the UK. These decisions are based on the student population for each city, on-going investments into the universities and the ROI you can expect to achieve.

Liverpoolliverpool-docks-liver-building

Liverpool is a city in the North West of England that has a growing student population and is very popular with international students.

The city has a student population of 70,000 spread over four major universities, including a specialist school that studies tropical medicine. 35,000 students study at the redbrick university — the University of Liverpool — and approximately 8000 are international students thanks to the ties UoL has with its sister school in Shanghai.

As of 2017, there are only 21,700 PBSA units in Liverpool, which is approximately 50% too few units to accommodate the demand. Additional units are under construction, but even with these projects completed, there still aren’t enough properties.

Student property rental figures in Liverpool are some of the best in the country. The average yield rate in the region is 5.05%. However, if you buy student accommodation in the L1 postcode, you could see yields as high as 10%.

Stoke-on-Trentbuy-student-accommodation-stoke-on-trent-terraced-road

Stoke-on-Trent has grown in popularity recently, and the town is becoming a major player in the student accommodation sector. With over 25,720 students, there has been a significant demand for PBSA properties from students attending the two major universities, Keele and Staffordshire.

The area itself has undergone a dramatic transformation, and is the number one city in the UK for employment growth with some of the major employers including:

  • Jaguar Land Rover
  • Bet365
  • Pirelli
  • Vodafone

Because of the many potential jobs, graduate schemes and work experience opportunities in Stoke, we expect the region to surge in popularity even further among student demographics.

Cardiffrivers-and-stadium-in-cardiff

Cardiff is a city in Wales that UK-based experts have classed as an emerging market in the PBSA sector.

The city has three universities which educate 43,000 students, over 9000 of which are international students. 25,000 of Cardiff’s students are looking to live in PBSA but cannot find the accommodation available. In total, demand outnumbers the supply at a ratio of 2.5:1, meaning there are excellent opportunities for investors to capitalise on the city’s needs.

Rental yields in Cardiff are also among the highest in the UK at 5.59%. The average rental yield in the UK sits at 4.72%.

Manchesterbuy-student-accommodation-two-students-crossing-road-manchester-city-centre

Manchester ranks highly on many lists for student property investments in the UK. Experts based in the UK even put Manchester in the number one position for student property investments.

The city is home to four major universities and over 100,000 students. Manchester has the second largest student population in the UK and is one of the most popular areas for international students to come and study, which often results in a significant ROI.

According to Manchester City Council, there were only 24,000 PBSA beds available in the 2018/2019 academic year, which was significantly lower than what was needed. As a result, the council wants to introduce more competitive alternate housing onto the market with new PBSA properties.

If you are looking to buy student accommodation in Manchester, you can expect an average rental yield of around 5.55%. In some parts of the city, it’s not uncommon to see rental yields reach as high as 7.89%.

How Treo Investments Can Help You Buy Student Accommodation in the UK

The student accommodation market in the UK is widely considered one of the safest markets to invest in. With large student populations and assured rental income, many investors from around the world including Dubai, Hong Kong and Saudi Arabia are investing heavily into the market and seeing great returns on their initial investment.

Treo Investments will play their part in sourcing the right property investment opportunity for you. Our team takes the time to understand what it is you are looking for in a student property investment so we can find the deals that will bring you the most value.

We have a strong network in the UK property scene, and our insider knowledge of the student accommodation sector means we will only show you investment opportunities that will tick all your boxes.

Make sure to get in contact with us to find out more on how Treo Investments can help you buy student accommodation in the UK.