Foreign demand likely to boost student property sector in UK

Student demand to increase property market activity

An increasing demand for university places in the UK from international students means that more are likely to be seeking property to rent, it is claimed.

Regional cities are expected to see the biggest demand in rental growth rather than London, according to experts. Indeed, the latest Knight Frank Student Report 2011, indicates that regional cities in England and Wales are seeing the greatest rental growth at 4.1%, compared to historical leader, London, which recorded a 3.6% fall in 2010.

Ray Withers, director of property investment agency, Property Frontiers which has successfully marketed numerous student accommodation projects in Liverpool, said that rents in the last academic year increased by 13%, vastly exceeding the average 5% growth per annum seen nationally in the six years to 2008/9.

‘With Liverpool’s universities expecting to attract high numbers of applicants for the next academic year, 2011/12, many from overseas, this regional city presents strong demand for student accommodation and in turn an attractive opportunity for buy to let investors,’ said Withers.

The Government’s radical reforms in university funding and student finance which come into force in the third quarter of 2012 will undeniably change the landscape of higher education in the UK in the coming years and more applicants from overseas are expected.

The Universities and Colleges Admissions Service (UCAS) is expecting a significant rise in demand from European Union countries, the Far East and Hong Kong. With ever increasing numbers attending university the pressure on existing student housing stock has never been greater.

For those considering investing in student accommodation double-digit returns can be expected but it is essential to select only the finest opportunities available, according to Withers. Overseas students, for example, tend to be wealthier and have more exacting demands in terms of location, facilities and privacy.

The latest student accommodation project available through Property Frontiers, Hatton Garden, meets all of these key criteria being located in the heart of the city, only minutes from John Moores University, Lime Street station and all the shops, restaurants and nightlife students’ desire.

It has 98 private en-suite student rooms with flat screen TV and Internet connection within a refurbished early 19th century building. On site facilities include ample kitchen space, communal lounges with 42 inch flat screen TVs on each floor, an on site gymnasium, computer/media service centre, management office and laundry facilities.

The company says that prices start at £48,000 and investors can expect double-digit returns of 10.03% net, the first year. Monthly rental income is guaranteed to be paid from 01 March 2012.

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