The growth and excellent yields available to investors make student accommodation one of the UK’s leading investment opportunities according to a new report.
The research, conducted by Mistoria Group, demonstrated that student property remains an excellent investment option, with larger market growth and rental yields being delivered to investors.
Student Property Investments
The recent surge in university applications, following the removal of the applications cap by the government, has led to a rapid increase in the demand for student accommodation as many universities struggle with a shortage.
Private developments, offering high quality student studio apartments and rooms have become a more significant part of the student property market, with students beginning to favour these developments over the traditional student ‘digs’. The shortage of university-provided accommodation, combined with the growing trend for high quality student developments has helped the student accommodation to continue its growth.
In particular, student properties in the North West have experienced a significant increase, with average rental yields reaching up to 13% over the first three quarters of 2014, substantially more than the UK average of 6.37% that was estimated at the start of this year and standing on average 5-6% higher than the UK’s buy-to-let market.
The strength of the yields and the rate of growth in the student market have led to the rate of investment in the sector dramatically increasing. According to the report, £2 billion was invested in student properties in 2013, demonstrating that investors are continuing to see the student accommodation market as an excellent source of investment.
UK Student Accommodation Investments in the North West
As student properties continue to be an excellent investment opportunity for investors, Principal International is delighted to offer a range of exceptional student property investments located in the fastest growing area in the UK: the North West.
Operational and fully tenanted, The Grand Mill in Bradford offers investors an immediate income of up to 8% NET yield for an investment of just £39,000. This fully managed property investment is located just 0.4 miles from the University of Bradford and Bradford College, making it ideally placed for students in the area.
For a higher yield, Holmes Street Burnley is an off-plan investment that will be completed in time for the start of the 2015/2016 academic year. This development offers investors 10% NET yield which is contractually guaranteed for 5 years, in addition to 5% interest accrued on deposit. This development will be fully managed and stands just 250m from the University College of Football Business, providing accommodation that perfect for those attending the institution.
This article first appeared on Principal International on 29th October 2014.