Student Property

Student Property Investments | Buy Student Accommodation UK

Student Accommodation Investment Opportunities


The benefit of investing in student accommodation is that you have a huge target market as over 2 million students are currently studying in the UK. There is often a management company in place so you can save yourself the hassle of having to deal with the day-to-day maintenance of the unit. Many operators offer contracted returns of up to 9% and investing in new developments with premium facilities will allow for good levels of occupancy for years to come.

Our student property investment opportunities are located in areas where there is a large student population, allowing for good levels of demand and strong occupancy levels.

Student Property Market

High Demand

Higher Yields

Hands Free

One Touch property consultants are an experienced team who will share their expert knowledge to help you take an investment decision with confidence and ease

Best places to invest in student property

Where are the best places to invest in student property?

If you choose to invest in student property, you will need to research cities with a large number of students and accommodation in convenient locations.

We have weighed up the fundamentals of several student towns and cities to suggest some of the best places to invest in student property. These towns and cities stand out due to a variety of factors, from having a high number of students to planning restrictions on student property to suppress competition.

Find out which cities can offer promising returns and the factors that drive them by clicking below on the green arrow =>

Where should investors consider buying student property?

  1. Is the UK student property market still attractive to investors?
  2. Alternative options for investors within the student property market
  3. Are student property investments sustainable?
  4. Where are the best places to invest in student property in the UK?

There are many events that have occurred in recent years that could have affected the student property market, from Covid to Brexit. However, if you choose the area for your investment wisely, you can still achieve good rental yields.

When it was announced that the UK was leaving the European Union, doubt was cast over whether the United Kingdom would still be an attractive place to study. There were concerns over whether EU students would have to pay higher fees, and what their status would be after they had finished their studies, and arguably this has deterred some from choosing to attend a university in the UK.

That being said, the United Kingdom is still home to some of the best universities in the world, and the dip in the value of the pound has made it more attractive for those from outside the EU to study. Considering the profitability depends upon such a delicate balance of numbers, is it still worth considering student property investment opportunities? If so, where are the best places to invest in student property?


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Is the UK student property market still attractive to investors?

The outlook for UK student property market remains positive and there still appears to be strong demand from institutional buyers for UK student property. Cushman and Wakefield report that student property will remain a robust and profitable asset, due to strong demand. The UK maintains a healthy amount of student applications, with overseas applications up from 2019 figures. In partnership with Rasameel Investment Company, Cushman and Wakefield have just acquired two developments in Edinburgh and Leicester for a combined £22.2m. This indicates their continued confidence in the market.


Alternative options for investors within the student property market

Investors do not have to invest in shares or a student fund. Other options include studios in purpose build student property developments. On average, the studios typically cost £80,000, with the more affordable student en-suite rooms (pods) priced just below £60,000. The typical net income ranges between seven to eight percent (7%-8%) after full management and other associated costs have been deducted. The benefit of investing in studios and pods is that an experienced management company will generally handle the day-to-day maintenance, and issues such as finding new tenants and marketing the studios. This lifts an enormous weight off the investor’s shoulders, and means it is perfect for the individual who cannot dedicate a lot of time to the investment, or for those who are living overseas and cannot be physically present to undertake daily maintenance tasks.


Are student property investments sustainable?

Those concerned about the sustainability of the UK student property investment sector can draw upon the analysis provided by global real estate consultancies such as the Savills in depth report on the student market.

The report measures a number of factors including current availability of purpose-built student properties as well as the pipeline of future developments balanced against the student demand and university rankings.


So where are the best places to invest in student property in the UK?

Savills 2019 Student Property Development League Table


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Birmingham

Not only is Birmingham a good choice for buy to let investments, it is also promising for those looking to invest in student property. The city itself is hoem to five universities, so there is a large number of students. Property itself is also cheaper compared to other cities, even purpose-built student accommodation. In the Savills Student Property Development League Table, it was ranked in the first tier. Cities are ranked due to predicted occupancy rate and rental yield achieved after supply and demand fundamentals are measured.


Nottingham

Nottingham was also ranked in the top tier in the Savills Student Property Development League Table.

Home to over 70,000 students, Nottingham has one of the largest student populations of any city in the United Kingdom. It is ideally located in the middle of England, and its strong transport links makes it easily accessible from most other parts of the United Kingdom.

It boasts a £12bn economy, making it the economic capital of the East Midlands and £1bn has just been invested in transport links and infrastructure.

Article 4 direction has been adopted in Nottingham for the past six years. Article 4 direction prevents family homes being converted to houses of multiple occupation. Thereby restricting the supply of student housing. Where demand has continued to grow, prices have continued on an upward trajectory much to the delight of Nottingham landlords.

The only way to accommodate more students in Nottingham is through the development of purpose-built student accommodation units. As the council has restricted the supply of alternatives, good occupancy levels can be achieved.


Leeds

What makes Leeds and attractive city for student property investment?

Leeds is ranked in the upper second tier for student property demand. The vibrant city attracts a cosmopolitan crowd and the renowned University of Leeds attracts students from across the UK and overseas.

Leeds has the ideal environment for a good student property investment. Historically, development levels have been low, so there is not much competition and high demand. Due to the fact that students generally come from far afield to study in Leeds, many need accommodation as opposed to commuting in from home. Thirdly, they are more likely to choose purpose-built student accommodation over university owned halls of residence.

Leeds has one of the most diverse economy of the all the UK’s main employment centres. In 2016, Leeds saw the fastest rate of private sector jobs growth of any UK city and has the highest ratio of public to private sector jobs of all the UK’s Core Cities.

Marks and Spencer’s was founded in Leeds. Back in 1884, Michael Marks opened up his penny bazaar stall in Leeds Market before enlisting the help of Tom Spencer a decade later. Soon after, they moved to a permanent spot just around the corner and the rest, as they say, is history.

Contact us today to find out more information regarding the best places to invest in student property. To learn more about this asset class, download our student accommodation investment guide.

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How to compare student property investment opportunities

How to compare student property investment opportunities

Student property investments often outperform other commercial property types in the UK. However, some opportunities can be more lucrative than others.

If you choose a city with weaker fundamentals, there is a risk you will not achieve the returns you anticipated. Here, we discuss how you can compare investment opportunties and decide upon the one with the more promising prospects.

From supply and demand statistics to which management company is in place, these factors will greatly affect your investment success. Click on the green arrow below to learn how to evaluate student property investments =>

Student numbers in the UK

The student property investment market continues to outperform other commercial property investments in the U.K. The student numbers have continued to increase year on year and a record 40.5% of 18-year-olds applied to go to university in 2020. The United Kingdom also continues to attract students from overseas because, when compared with other European countries, it has the highest number of universities within the top 400 ranked globally. The number of overseas students enquiring about studying in the UK is bouncing back. According to UniQuest, there were 67 per cent more enquiries in April 2020 compared with April 2019.


Institutional investors in the student property market

The marketplace has attracted several institutional investors; Blackstone’s acquisition of iQ Student Accommodation for £4.66 billion in February was the UK’s largest ever private real estate deal on record. There was also Singapore-based investor Mapletree’s purchase of several Unite developments and DWS’s £600 million purchase of Vita Group’s purpose-built accommodation units.


How can everyday investors access the student property market?

Although, the student property funds are active in the market, everyday investors also can take part in this lucrative investment market.

One Touch Property Investment, who recently won Property Wire’s “Best Student Property Investment Provider” (April 2018) have helped hundreds of investors to purchase student accommodation investments.


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Analysing student property investments

We can compare some recent opportunities in terms of some of the most common considerations, namely:

  1. Supply and demand
  2. Return on investment
  3. Rental Guarantee Period
  4. Credibility of the developer
  5. Ongoing management company

Supply and demand

Often the demand for student accommodation is related to the number of students attending the universities, which is often a function of the University ranking. Universities, such as the University of Sheffield is ranked 14th in the UK and 117th worldwide according to the Times Higher Education World Rankings. This gives it a certain element of prestige and makes it more likely that people from overseas recognise it and are more likely to apply there.

The price of student property investment in Sheffield is priced from £56,000. For that price you can receive a 9% net rental yield contracted for three years. Communal facilities such as an onsite gym and gardens make it an attractive option for students.

The other balancing factor is the supply side; you can keep abreast by reading student property guides and looking into local law changes such as the Article 4 Direction, which has been adopted in places like Nottingham, Newcastle and Leicester. Article 4 basically restricts the conversion of single-family homes into student residences, thereby limiting supply. It means that students are increasingly reliant on PBSA to satisfy their needs rather than the typical HMOs of yesteryear.


Investment Returns on Student Property

The bulk of the student properties are purchased off-plan up to a year to completion. Some of the developers offer interest paid on deposit but for the majority, that means that there will be no return on investment for the first year.

The typical net yields are between 6% to 8% per annum. Where there is rental growth we have typically seen capital growth of 3% per annum. Therefore the average inevstment return for student property will be 9% to 11% per annum. There are obviously situations where investors have recieved lower returns after 5 years when more competition occurs.


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Rental guarantee period

Some student property investments such as the one in Sheffield offer immediate returns of 9%. This is not the only consideration. You will have to ensure that the investment is attractive enough to ensure occupancy outside of the contracted period. This is where factors such as location and facilities will be of importance.


The Credibility of the Developer & Management Company

It is vitally important know who are working with, the outcomes could end up disastrous. You can conduct research on the developer to see their record of successfully completed developments. You will need to check if there were any delays, as this can affect the occupancy of your unit and the rental payments you receive. Alternatively, you can invest in something that is already built and up-and-running. This will negate any development risk. We have plenty of resale options available that are complete and tenanted.

You can avoid the grief by using an award winning student property broker, like One Touch Property Investment, who will help you avoid damaging situations through the process of conducting background research on the developer; thereby helping you to select trustworthy partners and reputable management companies to work with.

“We have helped over 200 investors acquire student property in the best locations by seeking out reliable partners to ensure that they can take their purchase decision with confidence and ease” says Arran Kerkvliet.


Ongoing management company

Usually, a management company is appointed to oversee the day-to-day running of the development. This allows investors the freedom to buy property in locations that offer the best fundamentals, rather than limiting themselves to investing nearby in case anything goes wrong. Management companies usually take a percentage of rental income. In return they handle all the tenancies and day-to-day maintenance. If you are unhappy with the management company in place, you can always replace them if agreed by the owners of the other units.

Start searching for properties or contact us today to find out more information regarding the latest student investment opportunities.

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