A lucrative investment strategy thanks to exceedingly high demand, the UK student property sector continues to boom, despite plenty of home grown and international competition. Both conventional Houses of Multiple Occupation (HMO) apartments and UK off-plan student property are being snapped up as canny property investors realise there’s impressive money to be made in these markets.
Overseas students are increasing their share of the UK student market, while universities and colleges are being encouraged to take on higher numbers of students to help boost the UK economy.
Why investing in off plan/new build UK student properties makes sense
Students’ property demands have changed in recent years. Much of this is down to the new-look ‘student pod’ accommodation which has been going up in London and other UK cities with large student populations. These are full of ‘mod-cons’ and clever dual purpose studio-style furniture; more importantly they also tend to be within the city centre near clubs, pubs and shops – rather than in outlying areas where public transport becomes a necessity.
Image via Flickr
Student pods are more like a hotel than the new-build UK student properties which resemble self-contained studios and prove more akin to independent living (and which, understandably, prove more popular with your typical mature student).
Image via Wikimedia
Investing in conventional UK student buy to let is still a winner
The appeal of HMOs (ie renovated large tenement and period houses) to students is that the rooms are large and they can live together with friends under the same roof. For landlords, it’s the extremely high yields they can look forward to receiving.
One of the drawbacks of HMO UK student property has always been the amount of management involved. However, with such high yields, landlords can afford to hire a reputable local agent to do this for them.
Where to buy UK student property
The best places in which to invest in UK off-plan student property and student HMOs are those cities which are just bursting with students looking for accommodation, and where you can reap yields of up to seven per cent in the top three best performing.
The list is topped by university towns in the North East of England such as Sunderland, Newcastle and neighbouring Durham. Why? Mainly because property here isn’t expensive to buy in the first place (around £90,000 for a starter student flat).
Image via Freestockphotos
Further south in Manchester you’ll pay a bit more for the average UK student property – around £135,000 – but the town, with its four universities, attracts 90,000 students annually. And they’ve all got to live somewhere… might as well be your own UK student property!
Another lucrative UK student property city is Birmingham. Although it has its own university and colleges, Birmingham isn’t too far away from those famous centres of learning in London (where student property can be so expensive to buy in the first place that yields can work out well under two per cent).
Finally, another city we’re putting our money on this year, is Glasgow. Scotland’s largest city with a population of around one million – 170,000 of them students – the ‘Dear Green Place’ has an especially high number of tenement properties awaiting conversion into an HMO student property.
If you’re thinking of investing in UK student property then here at www.ukpropertyknowledge.com we’d be happy to discuss strategy with you and point you in the direction for some learning of your own.