A Recession Proof Investment
High yields. Totally "hands-off" investment.
Strong nationwide rental demand.
Student accommodation has it all.
There is a widespread difference of opinion regarding what will happen in the residential and commercial property market right now in the UK. One thing that few experts disagree on is the potential for both capital growth and surety of high rentals that comes with well-located student accommodation in key cities with prestigious universities. Furthermore, as always happens in times of financial downturn and higher unemployment, student numbers increase, providing the investor with a recession-proof investment.
Over the past six years rental incomes in this sector have increased at 5% per year, in contrast to 0.6% for the commercial market as a whole, and the occupancy rates for student accommodation currently sit between 97%-100%.
Compared to residential tenants who only sign up for 6 month contracts, this provides incredible stability that is very hard to achieve in the global economic climate, which has made this opportunity so popular with both UK and overseas investors.
A passive income and "hands-off" investment.
Most property investment is rarely as passive or hands off as we would like. However, by working with a very experienced and established management company that specialises in the student accommodation market, this investment provides you with that truly ‘armchair’ investment where you can sit back, relax and see your regular monthly income hit your bank account.
Student accommodation has become an asset of recommendations for our investors, whether you're looking to add to your existing property portfolio, or if this is your first ever property investment. Our reasoning for this is quite simple: it's a low risk, high yielding and totally "hands-off" investment.
Knight Frank have reported through their own independent research, that only 50% of all students in the UK have access to high-quality purpose built student accommodation.
This figure drops dramatically to 20% when you compare the student purpose-built housing ratio in London alone. This means that there are nearly 100,000 students in London who do not have access to purpose-built student accommodation, helping to create a huge demand in a market with very limited supply, ensuring rents remain high and your property stays tenanted.
10 Good reasons why this is our investment of choice
- Cash flow positive, long-term investment
Typical rents are significantly higher for student properties than a comparable BTL residential property in the same city.
- More students attending universities, creating a solid and sustainable demand.
Student numbers are set to continue to rise in coming years – especially in London which has the most students of any city in Europe and the most international students of any city in the world. Other cities with large student populations include Manchester, Nottingham and Sheffield.
- Minimal voids
Tenanted for almost all of the year and you typically know seven months in advance that your property is tenanted for the next academic year due to pre-lettings.
- Hassle-free investment
Private halls are managed by on-site management teams who will handle all bills and ground rent, meaning you only have one management fee to pay.
- Rental income has increased by 5% each year for the past six years in the student accommodation property sector. In 2009, many schemes actually achieved 10% gross rental increases.
- Student property has continued to be one of the most resilient investment sectors in the UK during the economic downturn, with most rental incomes and property values remaining stable or increasing.
- New build properties available
Houses and/or flats, as well as refurbished homes.
- Competitive finance available
By equity releasing from your current assets the purchase becomes 100% funded.
- Exit strategies
Although we recommend student accommodation as long-term income investment, long-term provable high income on a property makes a property much more desirable to investors.
- All of this helps to reduce the risk to the investor!