According to the latest research, the rate of investment from private landlords into student accommodation is showing no sign of slowing down. Student property is a good performer and is constantly giving good returns for investors.
The research comes from property experts CB Richard Ellis and Knight Frank who also highlighted the fact that regional university cities are performing much better than central London in terms of value for money over a sustained period of time. The research also highlighted that the United Kingdom the student accommodation market accounted for more than £740m worth of capital last year which has been put down to the fact that there is such a high rate of student occupancy in regional cities. Because there is a lack of university-owned properties, private landlords are currently responsible for around 40% of student housing needs. This makes it a perfect market for landlords and many are purchasing landlord insurance on new investments as they rapidly expand their portfolios to feed the need in this sector.
The rate of university applications is increasing each year, meaning that there has to be a high supply of student accommodation to meet the demand. There are also a larger number of international students coming to the UK to study and they too are looking for accommodation for the duration of their studies. The past few years have continuously shown that student property investment will provide impressive returns, a fact backed up by research from Paragon Mortgages showing that last year; student let properties generated the highest yields throughout the letting sector.
The Chief Executive of the Paragon Group, Nigel Terrington, said: “Yields are an important component of a landlord’s overall business plan because they give a good indication of the income that student property generates.” It is reasonable to assume the market will attract the attention of more investors over the coming years.