Should I invest in student property?

Should I invest in student property?

Due to the fact that we spend a great deal of time speaking to property investors and those looking to get started in property investment, we often hear the question should I invest in student property?

It’s not always a particularly easy question to answer, depending on your circumstances, but in a broader sense student property in the UK, and investing in student property, has exploded in popularity over the past five to ten years.

There’s a good reason too, student numbers in the UK have exploded in that time and the number of high-quality institutions has expanded too, meaning that there are more areas that are suitable and profitable for property investment.

As an example, according to Ibis world, the UK market is currently worth $4 billion, with a massive 22.7% growth in the market in 2022 alone.

These are fairly staggering figures and go some way to explaining why you should invest in student property in the UK

Should I invest in student property?

Student property as an investment is materially different in terms of strategy from residential property or commercial property investment.

Student property is seen as a longer-term investment due to the fact that yields, or your rental income, are higher and more sustainable over the long term than other types of assets.

Whilst the price likely won’t rise significantly over this time, these properties do tend to hold their value, but because they’re cheaper to buy, and the price of entry into the market is lower, it means that landlords are able to diversify their portfolios and invest in student property as well as residential, rather than putting their eggs in the same basket, as some may say.

Looking further under the surface, the figures for the market speak for themselves. Savills stated in their latest report on the market ‘UK purpose-built student accommodation (PBSA) has continued to show that it is counter-cyclical, with growth in student numbers during a time of economic uncertainty.

Domestic student demand is at an all-time high, but the supply of stock in the private rented sector (PRS), for example, HMOs, is constrained and contracting. There is an opportunity for PBSA owners to meet that excess demand by providing a product at a price point that is attractive to domestic students. The latest UCAS application data shows continued growth in the number of domestic students and high-value international students.’

Buy Association too noted about growing demand in the sector, ‘With evidence of growing demand and strong rental yields, this is leading more investors to look at student buy-to-lets. And rental demand will likely always be high in university cities.

Currently, only 13% of UK landlords let to students. However, landlords who focus on students lets have a strong desire to grow their portfolios, particularly those with large portfolios.

Of those surveyed by BVA BDRC on behalf of Paragon Bank, 83% said they were unlikely to sell during the next year. And 33% said they will likely buy a student buy-to-let property in the next 12 months. This increases to 50% among landlords with 11 or more properties in their portfolios.’

Invest with yieldit

yieldit has a number of high-yielding student investment properties all across the UK, so if the answer to your question should I invest in student property is a yes, then you should get in touch with us today to discuss what you’re looking for and we can advise you on what we have available.

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