Student Accomodation investments

Student Accommodation has rapidly become the UK’s number one asset class for investors looking to achieve consistent high yields and an entirely hands-off investment.

Current Student Investment Opportunities

Hull Central Apartments

Starting from £135,000

98 Baker Street London

Starting from £125,000

Ancoats Gardens Manchester

Starting from £145,000

Investing in UK Student Accommodation

With the majority of Universities in the UK struggling to provide enough high quality accommodation to their students each year, and now with the introduction of Article 4 areas and licensing issues surrounding HMO’s, Purpose Built Student Accommodation is becoming an ever-popular investment for investors across the globe, without the additional stamp duty costs now associated with residential buy-to-let.

The UK is typically seen as home to some of the best Universities in the world, with the second highest level of applications for places, behind only the USA. The Russell Group Universities (the leading 24 Universities in the UK) have almost 1/2 million under graduates and ¼ million post-graduate students enrolled each year. These Universities and cities are unable to meet the current demand for housing, which is why Purpose Built Student Accommodation has taken off so rapidly. In total in the UK there are over 2.3m students, increasing on average by 2% per year, and currently the number of PBSA properties can only house around 20% of the student population, with the rest having to live in low quality, bad location properties.

Student Accommodation is also one of the few asset classes that can claim to be virtually recession proof – performing well through the 2008 financial crisis. The reason for this is that universities continued to receive record levels of applications year on year, creating consistent demand from students for high quality accommodation, and continues to do so until this very day, and will continue to do so for many years.

Investors in PBSA will purchase a studio, or entire apartment (comprising of multiple pods and shared communal facilities – kitchen/living room), on a leasehold basis, typically 125 years, receiving full legal title, all registered with the Land Registry in the UK.

Investors then sign a management agreement with the operating company of the building, who will most likely pay a rental assurance for a fixed period of time – it is standard for the rental assurance period initially to be 5+ years. This provides an entirely hands-off investment for the investor.

When the time comes for the investor to sell, they can either sell at the price they paid for the property, keeping the yield for the new investor the same, or they can do what is sometimes known as yield compression. This involves increasing the price of the apartment, which brings the yield down. Some may think a secondary investor wouldn’t invest at a lower yield – however there are many investors happy to take a lower yield as they will be purchasing a completed, ready cash flowing asset, with a proven track record, rather than investing off-plan and having to wait a year or two in order to see their returns.

PBSA is a great part of any portfolio, offering this assured stable income, however, it is worth noting that there is currently no mortgage financing available for this asset class, meaning investors are required to invest with cash only.

Contact

Sales Office

Lansdowne House, Berkeley Square,
Mayfair, London, W1J 6ER
+44 (0) 2039507939 info@thirlmeredeacon.com

Dubai

Floor 31, Oberoi Business Centre,
Business Bay, Dubai, United Arab Emirates
+971 (0) 4 818 7277 dubai@thirlmeredeacon.com

Student Accomodation investments

Student Accommodation has rapidly become one of the UK’s top asset classes for investors looking to achieve consistently high yields and an entirely hands-off investment.

In 2020, despite the pandemic, the Purpose Built Student Accommodation sector recorded its highest investment volume. The long term fundamentals of purpose built student accommodation remain strong.

Current Student Investment Opportunities

Hull Central Apartments

Starting from £135,000

98 Baker Street London

Starting from £125,000

Ancoats Gardens Manchester

Starting from £145,000

Investing In UK Student Accomodation

The UK is home to some of the finest higher education establishments in the world, with the second highest level of applications for places, behind only the USA.

The Russell Group Universities (the leading 24 Universities in the UK) have almost half a million undergraduates and a quarter of a million post-graduate students enrolled each year.

Savvy investors will seek to secure student accommodation in the top university cities to ensure there is a steady stream of demand.

Is PBSA a good investment?

Purpose Built Student Accommodation (PBSA) is a good investment option, especially for those seeking a property investment type that is hands off and has a low entry price point.

With the majority of Universities in the UK struggling to provide enough high quality accommodation to their students each year, and now with the introduction of Article 4 areas and licensing issues surrounding HMO’s, Purpose Built Student Accommodation is becoming an ever-popular investment for investors across the globe, without the additional stamp duty costs now associated with residential buy-to-let.

 

PBSA is increasingly popular with students

The COVID-19 pandemic has led to an increase in the demand for self-contained student accommodation as a preference over shared houses meaning PBSA is increasingly popular.

Furthermore, this type of accommodation is more appealing to international students who seek a smooth transition when they’re moving to a new country to study and like to know everything is modern and in working order when they arrive.

With a shift in priorities through the pandemic, many students are now choosing to live in private studios rather than student house shares.

Contact

Sales Office

Lansdowne House, Berkeley Square,
Mayfair, London, W1J 6ER
+44 (0) 2039507939 info@thirlmeredeacon.com

Dubai

Floor 31, Oberoi Business Centre,
Business Bay, Dubai, United Arab Emirates
+971 (0) 4 818 7277 dubai@thirlmeredeacon.com