With so many student housing investment opportunities across the UK, it’s a big market with many benefits. But is it right for you? Our guide can help you decide.
Is student housing investment right for me?
Last academic year, there were 2.32 million higher education students in the UK. They all need somewhere to live, so it’s no surprise the student housing market has taken off – and keeps growing. In fact, the UK’s student property sector is set to reach a total value of £53 billion by the end of 2019 (SelectProperty).
In a nutshell, student landlords typically enjoy:
• Decent returns
• More income from renting per room
• An ever-growing market
• Tenants who are less fussy about dated properties
• Lower housing prices in regional towns and cities
• Less impact during a recession as people stay in university
Let’s take a closer look at some of these benefits. Since you rent per room (instead of per property) you can expect to make more from your student housing investment. Better still, if one of your tenants falls behind with their rent, there’s less to lose since the other students will still be paying their share. And when one tenant moves out, you’ll likely still get rental income from the other tenants – compared to renting to a family who all move out together.
Another big benefit is that you can find student housing all over the UK. That means you can steer clear of more expensive markets and get a decent return on cheaper properties in regional areas where the student housing investment market is thriving.
What student housing investment returns can I get?
Incredibly, average property prices in the UK’s top 50 university towns and cities soared by £28,725 between 2015 and 2018 (HouseSimple).
Just look at Coventry, where property prices rose from £114,625 to £184,690. That’s a 61% increase from when students started their three-year degrees to when they graduated! (HouseSimple)
In Manchester, average property prices rose an impressive 26.7%. Popular university cities Essex, Kent and Bristol have all seen house prices increase more than £53,000 since 2015.
We’re also seeing a 25% increase in purpose-built student accommodation (PBSA) for the 2019/20 academic year. On top of a flurry of construction work in cities like Leeds, Birmingham and Manchester, today’s student housing investment opportunities seem limitless. (LDEvents)
Of course, your student housing investment returns will depend on many factors – from where your property is located, to the post-Brexit economy. But for now, the student housing market stays strong.
How to invest in student housing
There are many ways to invest in student housing. You could choose to invest in purpose-built student accommodation or buy a standard home and rent it out to individual students or a group.
Before you buy, it pays to do your research. Take time to get to know the area you want to invest in and choose a property in an in-demand location close to campus.
Just be mindful of new stamp duty surcharges and tax relief changes, as these can affect your investment. There are also many other risks and challenges you’ll want to be aware of – so be sure to get the right advice and do your due diligence. Armed with the right advice and insurance, you may find your student housing investment to be very lucrative.
I’ve made a student housing investment. Now what?
That’s great! The next step is to protect your property, your tenants and yourself with the right insurance.