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Student Accommodation, UK.

Student Accommodation, UK

Income, Return - Medium

STUDENT

Nothing seems to stop student numbers at the UK’s Universities from growing year on year. Despite the well publicised increase in student fees, cost of living and competitive admission grades – the numbers continue to rise.

The traditional view that students are comfortable living in squaller could not be more dated. The UK’s top universities are now having to compete to attract the best home-grown and overseas students to their educational institutes. One way they do this is through accommodation, building a picture of the dream student pad for the prospective, eager student. And with 490,000 places available at our Universities and international applications up 11%, its no wonder that the demand is so high.

The days of students surviving off a basic diet of beans is also long forgotten. Student loans, bursaries and parental support means that a vast number of British students are demanding a living standard which they have grown accustom to at home: En suite bathrooms, catered accommodation, fast wi-fi, cleaners etc etc. Coupling this with the estimated 100,000, predominantly wealthy, international students from India, China and Nigeria alone, its no surprise that weekly rental rates in London are estimated at around £190, and £120 in provincial cities.

So how does this relate to you?

Student accommodation is widely regarded as one of the safest and most lucrative asset classes. Big institutions, such as Aviva and Legal & General, are snapping up properties at an increasing rate and foreign based funds aren’t far behind, most recently a case of a Dutch pension fund looking to purchase in excess of 25,000 student ‘beds’.

For the individual investor, capital requirements can start at around £17,000 with returns on capital employed averaging between 15%-20%. This may seem surprising and unrealistic, given the current state of the financial markets, but the nature of this investment sets itself apart from the standard student let.

CRM Management proposal relating to Vita student accommodation scheme,Crosshall Street, Liverpool

Student housing is top property asset
FT
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Student Housing Emerges a Winner in an Era of Poor Returns
CBRE
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Investment in student accommodation doubles
FT
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Investing in student properties
Telegraph
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