Whether you’re looking to invest with Purpose Built Student Accommodation (PBSA) or purchasing buy to let, there are plenty of opportunities available.
International Investors
Student property remains a strong asset class with great returns. Even during times of economic downturn, the student population and number of applications continues to grow. A bleak economic climate can actually prove a major push for people looking to upskill, gain a solid education and become an even more desirable candidate in a highly competitive market.
There are now more full-time undergraduates than there were before the tuition fee hike and investment into the student accommodation market is going from strength to strength.
Market share from foreign investment is also on the rise with Singapore and other Asian countries favouring student accommodation for their overseas investment choices. This includes interest from both expats in Asian countries and natives who appreciate the clear, coherent opportunities available in the UK market.
Back in 2016, three of the world’s five largest individual student housing investment deals of the period took place within the UK with all completed by international investors. But this begs the obvious question –what about Brexit?
The Brexit Question
Just like many other aspects of investments and financial planning, Brexit remains lurking in the shadows when it comes to investing in property. Many of our clients are initially uncertain about making any decisions about their investments before the impact of Brexit becomes apparent but the reality is far brighter than the media would have you believe.
Statistics showing the number of overseas students applying to UK universities speak for themselves. The number of foreign students applying to UK universities has surpassed 100,000 for the first time ever and applications from EU students outside the UK rose by 3.6% in 2018.
This is one solid indicator that the pull of an exceptional quality higher education study and the overall experience of studying in the UK rises far above any Brexit concerns when it comes to international student applications. The weaker pound and favourable exchange rate are also likely to be appealing factors, as well as the global appeal of London as a city that offers experiences like no other.
In any case, EU students currently represent just 6% of the full-time student population in the UK. This means that even if the impact of Brexit was extremely negative, enquiries from local, national and international students would still prove more than enough to tip the supply-demand scales in favour of property investors.
Student Housing Investments
A report from Savills complements these finds to show that things are just as positive on the other side of the investment coin. 2016 saw the UK achieve its second highest ever investment volume into purpose-built student housing (£4.5 billion), and the appeal of the UK higher education system refuses to be dimmed by any Brexit nonsense with our university heritage and high global rankings standing firm.
In fact, this asset class just continues to prove its resilience and strength against even the most powerful opposition to prove that student accommodation will always remain in demand.
This demand is only growing stronger and the quality of accommodation in both PBSAs and buy-to-let properties is improving all the time. As expectations rise among the student population, this encourages a healthy sense of competition with many investors willing to pay strong premiums for larger portfolios within a consistently driven and growing sector.
It’s all about balancing yield and growth, identifying the best locations in the UK for student housing investments and finding the most lucrative opportunities with new build PBSAs that are springing up all the time. A well-chosen student housing investment in an up-and-coming hotspot or evergreen location where there is strong demand and high quality accommodation represents a solid long-term investment.
Our team at Alesco has access to many of the most exciting student housing investment opportunities across the UK. We look forward to introducing them to you and your portfolio.
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Our team of professional property investors offer advice on all aspects of property investment and provide access to market-leading products with the aim to minimise risk and maximise returns. For further advice and support, please contact us directly on 0203 281 7433 or drop an email to info@alescoproperty.com
