Before we even begin to discuss student accommodation in the UK we would like to open up by confirming that university applications have increased by 2.7% this year in the UK and there will be in excess of 550,000 students getting themselves ready for an autumn start. The fact is that while the UK economy continues to struggle and household finances remain under pressure demand for university places in the UK continues to grow.
While we often hear the headlines regarding English/Scottish students and their relevant fee structures, it is worth noting the enormous number of overseas students currently in the UK. As a consequence many large investors are now looking towards student property which is perhaps not exactly what you would expect if you have an image of 20 or 30 years ago.
Official data suggest that universities across the UK are able to accommodate all first-year students in their halls of residence. However, the fact is that those who have passed the first year of their university courses will be looking for accommodation in the private sector which has opened up a raft of potential investment opportunities.
Quote from PropertyForum.com : “Over the next 12 months there will be serious questions asked of the Scottish electorate with the Scottish National Party pushing for independence while other political parties wish to remain part of the Union. This is an issue which has been ongoing for some time now but one which will come to a head next……”
It is worth noting that many first-year students may also decide to use the private sector for their accommodation needs although there is great experience to be had spending your first year in the halls of residence. As you might expect, while there are many universities across the UK it is the more prominent universities which are attracting the lion’s share of investment funding for property. The fact is that the better-known the university the stronger the flow of students both now and in the future and therefore the higher return on funds invested.
Fair play in the property sector
Unfortunately, as many university students will be out of their comfort zones and possibly miles from home, some unscrupulous landlords have taken advantage of these individuals. We regularly hear of weekly rents in London of £300 per room which equates to a potentially enormous income for a relatively small property. Thankfully, the student accommodation sector is now a more professional outfit, more focused and ultimately better regulated.
You will still need to do your homework with regards to the cost of individual student accommodation close to your university of choice but hopefully things should be a little clearer now that the bigger investors have joined the party. The UK government recognised some time ago that there was potential for mismanagement and indeed unscrupulous activity in the UK student accommodation sector (and indeed the private rental sector overall) therefore a number of safeguards have now been put into place such as a landlord register.
As you might guess, with the number of UK and overseas students continuing to grow so will demand for student property in university cities up and down the UK. The student accommodation sector we see today is very different to that of 30 years ago and thankfully it is much more professional, there is better value for money and indeed the quality of accommodation has improved dramatically.
This has attracted a significant number of professional investors to the student accommodation market and indeed there are potentially attractive yields available in many university cities. As governments north and south of the border have promised to keep spending on education, it looks as if this could be a long-term winner if you find good value accommodation with a relatively strong flow of student tenants.