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Student Property
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Investing in Student Accommodation

 

Purpose-built student accommodation has proven time and time again to be one of the most reliable, secure, income-generating asset classes within the world of property investment and is therefore a must-have for all investors looking to expand their portfolios.

 

Demand for high-quality new-build student accommodation is very high, with supply failing to keep up with all segments of demand in many locations. The market's resilience through the recession years and the introduction of tuition fees has created a safe and stable platform for investors who are looking for increasing rental growth, sharp yields and outstanding performance.

 

Assetz has been a long standing advocate of investments in the student property. In November 2014, the company won the OPP award for "Best Student Housing Broker".

 

 

The Past and Future of Student Housing

 

Over the past decade much legislation has been put in place to regulate Houses of Multiple Occupancy (HMO) licensing and shared student housing. This has undoubtedly had a noticeable impact on investment in the student sector. The new laws have restricted the amount of residential properties used as HMO houses and forced a gradual migration of students back towards purpose-built accommodation.

HMOs have long been recognised by the government as a source of loss in terms of potential council tax revenue and inefficient land use. Consequently HMOs are now subject to planning restrictions which make it more difficult for landlords to achieve licensing.

As a result, purpose-built student halls will continue to increase their market share at the expense of HMOs and provide benefits for investors, with high demand paving the way for increasingly secure investments.

A Focus on Quality

 

In recent years there has been a clear shift in student living trends. If once the main criterion for selecting a place to live was money, pushing the student population to live in low rent HMOs, there is now a definite difference in the expectations of university students.

The increase in tuition fees that came into place for students in 2012, has created a new breed of 'consumer students' who, in perceiving the burden of increased financial debt, have started to expect a standard of high-quality accommodation that provides more value for money. 'Consumer students' tend to be more independent and focused on study, with a preference for their own personal space and to live and study in an environment that will support their chances of successfully obtaining their degree. Purpose-built accommodation now needs to take in high consideration these new requirements in order to take over from dated student residences.

 

Students would now normally expect all of the following facilities:

  • Self-contained rooms (en suite, study space, kitchenette)
  • Enhanced technology, i.e. high speed broadband and Wi-Fi
  • Easy access to the university and associated buildings
  • Easy access to local amenities
  • High-quality, modern appliances, fixtures and fittings

Make sure the student property you are investing in ticks all the boxes!

Criteria for a Profitable Investment

It is fundamental for any investor approaching this sector to follow a specific criteria to recognise a safe and profitable investment.

  • Purpose-built - Refurbished buildings are not suitable for halls of residence due to the high cost of maintenance which they naturally incur. Investors will struggle to generate a reasonable income and struggle to sell refurbished student property.


  • Experienced Developer and Building manager - Having an integrated developer and student facility manager for student accommodation projects is a massive advantage. It ensures a rigid marketing plan will be in place to attract full occupancy on its completion, offering security for investors.


  • Profitable location - Location is fundamental when purchasing a unit in a purpose-built student development. Students are reluctant to travel far and they want to live in accommodation close to the educational hub and local amenities. The right location will ensure a constant occupancy that will reflect positively on investors' returns.


  • High-standards - The long-term viability of a development needs to be carefully considered. The design process should provide a high-quality building to match the market demand and to guarantee overtime, a safe return for investors.

 

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Risk Warning and Disclaimer:

The price of property can go down as well as up. Historic performance should not be taken as a guarantee of future performance. Geared property investment with mortgages can increase risk of losing money as well as increasing the possible gains. Mortgage products referred to in the website can be withdrawn by the lender or have rates or other terms changed without notice and reference to any products does not imply they are certain to be available in the future. Mortgages referred to may also have certain applicant restrictions and are for indicative purposes only although reasonable endeavours have been used to ensure that they are available at the time of publication and are applicable to a significant number of our purchasers. This site is for information purposes only and nothing on this site should be taken as definitive investment advice for your particular situation without you seeking additional guidance directly from ourselves or from other finance and property professionals. Property particulars on this site do not form part of an offer or contract. The developer and Assetz for Investors Ltd, whilst endeavouring to ensure complete accuracy in these property particulars, cannot accept liability for any errors. Valuations of property or indicated rents achievable are either estimated or derived from valuations and/or comparables and can change and should not be relied upon without your own additional valuation and research, but we have carried out reasonable endeavours to achieve accurate indications for these figures. All descriptions, dimensions, areas, reference to condition and, if necessary, permissions for use and occupation and their details, are given in good faith as provided by the developer and are believed to be correct. However, these are subject to change, especially, but not wholly, relating to any property that is off-plan or not yet complete. Any intending purchaser should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to their accuracy. The onus is on each individual investor to undertake their own due diligence, enquiries and inspections. Where shown, net yields are calculated as rental income less expected service charges less expected ground rent as a percentage of the property price. No void periods, optional letting agent costs, repairs or other costs are deducted. Our standard Terms and Conditions of Sale will apply. E. & O. E.