Bamboo, oil, diamonds and even parking spaces have all been lucrative investments for traders, but none has been as stable or as popular as the private student accommodation sector.
The past couple of years have witnessed the Higher Education sector becoming increasingly globalised, with students from around the world competing for places at UK universities. This desire for a British education, coupled with an increase in UK tuition fees, forced a rise in the quality of accommodation available to students and, as the institutions were increasingly unable to provide the higher standard required, specialist providers like Knight Knox International entered the market Continue reading
This is the second successive year that student applications for university places have fallen, following an 8.7% drop in the total number of applicants for all courses in 2012.
Last year Landlord Assist warned student landlords that the buy-to-let sector could be a potential casualty of tuition fee increases, fearing that many would-be students may be priced out of Higher Education.
The slump is being blamed on rising tuition fees, with some universities now charging as much as £9,000 fees for some courses.
For a long time the student sector has been seen as the most resilient for buy to let landlords, with strong Continue reading
The sector is also witnessing larger deals than ever before. During the past 15 months, the market has seen five £100million+ transactions. Prior to Q3 2011, no single deal had exceeded £85million. The University Partnerships Programme (UPP) Regional Portfolio typifies this – Dutch pension fund manager PGGM invested in a 60% stake in UPP’s assets this year, worth an estimated total of £840million.
Jo Winchester, Head of Student Advisory, CBRE, said: "Total returns remains a key driver for investors, as they flock towards the impressive returns given by student accommodation for a second year in a row. Our data shows that student Continue reading
Students starting university this September have been hit hard with the introduction of higher tuition fees, tougher A-level standards and increased accommodation costs. Thompson, who started AFS 12 years ago when he was at university, said: "Students have got it tough at the moment and the aim of these focus groups is to try and help improve one important element of university, accommodation."
In establishing the ideal student property, the team encouraged the focus group candidates to draw their ideal accommodation to help them to establish their vision and greatest priorities.
From their key findings, these are the top tips to keep a Continue reading
Typically the student market can be a lucrative business for landlords with yields considerably higher when compared to the rest of the residential investment market.
With this in mind it is often tempting for landlords to accept the first students that express an interest in a property to ensure full occupancy levels throughout the academic year. But Landlord Assist is reminding landlords to treat students as they would any other tenant and undertake full referencing checks first.
Graham Kinnear, Managing Director of Landlord Assist says: “Many students are great tenants and a good number are not. The key is Continue reading
With reported occupancy rates of 99% or more and a lack of supply in the private rented sector, rents for purpose built accommodation are expected to grow annually in most university cities at least in line with inflation.
Funds continue to prefer completed student accommodation projects with long leases, but there has been a notable increase in forward funding deals by institutions although they still mostly require long-dated or de-risked income streams.
It is anticipated that the "income stri" model, which creates a win-win structure where the university controls the residence and benefits from freehold reversion, the investor secures long term income streams and the Continue reading
“The UK is currently ranked third in the world for the price of tuition fees for overseas students, highlighting the need for universities to package their courses and institutions more attractively. Recently published reports on this sector have highlighted how, instead of a decline in student numbers, universities are experiencing an overwhelming amount of applications, something that their existing facilities cannot cater for. “
The private sector currently accounts for approximately 40% of all UK student housing needs, as universities increasingly find that they cannot keep up with the demand for affordable accommodation. Recently published research by residential property experts Knight Frank Continue reading
When most people think of student property they think leftover takeaways, beer can pyramids and dusty unused textbooks lying around, however student buy-to-let investors should really be seeing pound signs.
Last year in the UK investors put nearly £348million into the student property market, research from CB Richard Ellis revealed.
Investors are chasing average net yields of up to 7%.
Loxley McKenzie, MD of colordarcy.com said: "The student property market is renowned for outperforming the wider rental market – with landlords of student properties generating a higher average income by letting properties on a per-room basis rather than the usual per-property basis."
By leasing property Continue reading
“The growth in the capital has been fuelled by the particularly robust performance of the core market, and more specifically, accommodation with rents of less than £220 a week. This is also the rent bracket where rooms were filled most quickly, signalling a strong depth of demand.”
Returns in the regions moderated from 14.6% in September 2010 to 10.5% in September 2011. Outside London, Mr Pullan says investment in towns which have more than one university with a high density of students can be the most lucrative.
As Knight Frank predicted last year, average rents in London rose in September, climbing to £14,313, Continue reading
"2012 will be every bit as challenging as 2011, however there are still many good opportunities for property investors to make well-informed decisions," he said.
"In particular I believe investors should consider a greater exposure to alternative sectors such as residential property, student accommodation or health care property. One of the key attractions of these alternative sectors is they generally have a high income yield, an ability to track inflation and have low vacancy rates."
Clark said investors should look at the fundamental drivers which made them attractive compared to some commercial properties.
"Investors need to give greater credence to the opportunities and investment Continue reading