In the first half of 2015, £3.8 billion was invested in student property in the UK, and it’s predicted that this will rise to £5.7 billion by the end of the year. This amount is equal to the last three years combined.
The figures, released from Experience Invest, should come as no surprise as the demand for student accommodation continues to increase. In the last 10 years there has been a 50% increase in the number of international students, with 18% of the growing student population being international, according to the investment firm’s findings.
Students are also after a higher standard of living, and the tuition fee increase has made students savvier with money. Students are also moving towards preferring to live in purpose-built developments as opposed to Houses in Multiple Occupation (HMO’s).
This kind of living is cheaper for students and often gives them access to an on-site gym and cinema room. Just 13% would consider their student digs to be out of date and in need of repair, showing how well investors are looking after this growing sector.
However, many potential investors are unaware of how profitable a venture it can be, and just 17% of respondents were aware that investing in student property can result in a higher yield. Investors can generate between 5% and 8% per annum from a student property investment; much higher than the average 5% generated from a traditional buy-to-let.
