Investment into fully managed UK student property is now a hot topic for real estate investors the world over. The student accommodation sector now consistently outperforms every other asset class in the UK according to Knight Frank and The Financial Times. Last year we witnessed a staggering £2.7 billion invested, a 125% increase on investments the year prior.
The question remains, what is it about student property that is causing such a stir?
Student property remains one of the best performing property sub-classes of the last 20 years. Its resilience to cyclical economic patterns has created a platform for investors of continued risk-aversion during the economic downfall.
Despite the increase in University tuition fees, UCAS continues to report record numbers of applications, with over 600,000 applying for just 400,000 places for the 2013/14 academic year.
In 2012, 435,240 students (nearly 17.5% of the overall UK student population) were from overseas, and it has been predicted that by 2020 there will be 30,000 more international students coming to the UK to study.
The increasing student population in the UK presents an opportunity for savvy investors to capitalise on returns secured through the student property market. Students, who on average require accommodation for up to 51 weeks in a year, are now acting like general housing consumers. They now expect a higher standard of living. They want to live and study in an environment which will support their chances of successfully obtaining their degree, thus ensuring their university experience is the best it can be. They now require bespoke, purpose-built accommodation which lies close to the educational hub.
This extraordinary demand shows no sign of slowing down which means universities across the UK are now facing the problem of housing students. Many institutions fail to house all of their first year intake and accommodation for years 2 and 3 is even scarcer.
It is of no surprise then, that purpose built student residences enjoy occupancy rates of often 100% and are consistently delivering impressive annual yields to investors in excess of 10% NET. The most successful of which have been those that use a well-established operator with a substantial track record and well forged connections within the student sector.
All of these factors create a unique opportunity whereby investors can tap into an extremely lucrative rental market and at the same time help solve the on-going housing shortages for today’s student population.
Some university centres have virtually no private purpose built student accommodation and so the entire reliance is on university halls which are often old, of lower standard and offer no facilities. The highest yielding student properties appear to be in the north of England, where property prices are low but still command impressive rents. Cities such as Sheffield, Leads and Bolton are showing some of the most impressive returns.
Whilst it is clear the student sector has performed well over the past few years. It is widely thought that this trend is set to continue. The market is structurally undersupplied and whilst some areas are seeing an improvement in supply there are still many areas to capitalise on where demand significantly outstrips supply.
With entry level prices sometimes starting at 39,950 GBP this is an asset class that is affordable, safe and yet can generate a significant income stream that will compete with any buy to let market worldwide. It is clear that this is a sector not to be ignored and it seems those who act now will benefit most from this flourishing property niche.
HISTORY OF ASPEN WOOLF
Aspen Woolf specialise in identifying wealth building opportunities across the globe through property and alternative investment. Established in 2006 our head office in London has established a long standing reputation within the market place catering to investors based in over 100 countries worldwide. In 2014, Aspen Woolf Middle East was established to cater for a growing demand from the region. Our office based in central Dubai has been welcomed by our clients based in the United Arab Emirates and throughout the GCC.
We work with a wide range of clients, from individuals looking for real estate ventures or alternative investment schemes, to overseas funds and institutions looking to diversify their portfolios. With over 10 years of experience in the industry, our clients’ financial welfare is foremost on our minds, we will only recommend opportunities in which we have done extensive due diligence so as to minimise potential risks and at the same time maximise your returns.
Our client’s success will inevitably lead to our success. Our business was founded on this principle and so client satisfaction has become second to none. We believe that if we adhere to these principles we will continue to grow as a business while cementing our position as market leaders.
For more information you can email: enquiries@expatmoney.com
