The student housing investment market in the UK is enjoying record levels of growth and is set to hit a record £5.7 billion by the end of 2015. Here are the top 10 facts about why investors are choosing student property.
1. The rise in student numbers is a worldwide trend where growth has increased from 98 million in 2000 to 165 million by 2011 and is forecast to reach over 263 million by 2025. Over 50% of these students have come from Asia, followed by Europe, Africa and South America and it is predominantly the UK and US that are attracting these students to their shores.
2. There are 2.3 million students in the UK (388,000 International students) and currently, only 524,000 purpose-built student rooms available. The demand for student property is huge and rooms in new developments get snapped up immediately.
3. Despite the rise in tuition fees, student numbers in the UK have increased by 50% over the last 10 years.
4. 34 out of the top 200 universities featured in the Times Higher Education ranking are in the UK, making the country a hot spot for international students.
5. Student properties tend to be fully managed so this negates all the hassle traditionally associated with being a landlord.
6. Student housing has many years of proven stability, more so than any other type of property. It remains the only asset class which has seen consecutive increased annual returns, even during the recession.
7. The lifting of student number caps means that across university town and cities in the UK more PBSA (Purpose-Built Student Accommodation) is needed. Universities can now recruit as many students as they can cater for which means that the demand for student property is set to continue well into the future.
8. Increasingly, students are opting for PBSA over HMO properties and they are prepared to pay extra for getting it. Rents for PBSA are as much as 75% higher than HMOs in cities like Oxford and Newcastle, about 56% higher in London and even in cities with smaller student populations like Lincoln, they are 20% higher. This illustrates the opportunities that currently exist for Property Investors in the PBSA market and the potential returns that can be made.
9. PBSA offers higher quality accommodation, a secure environment, rents that are inclusive of bills, flexible options on tenancy lengths, professional management and excellent internet connectivity. This is why they are so attractive to students and why they are in such demand.
10. With student property consistently outperforming traditional forms of investments such as ISAs, bonds and equities, the changes in the pension reform is attracting many investors over the age of 55 who see student property as a way of funding their retirement.
Have we caught your attention? To find out more about student property investment and to discuss where the next opportunities are, contact us now.