Manchester based property investment company, The Mistoria Group are predicting a rise in the demand for student accommodation and the HMO market at a time when landlords and investors have concerns about the future of their investment properties in the HMO (House in Multiple Occupation) sector.
Statistics unveiled by the Universities and Colleges Admissions Service (UCAS) set alarm bells ringing and found property professionals bracing themselves for a dip in occupancy rates and rental income as the figures revealed that the number of applications to UK universities decreased by 7.7%.
In response to the announcement by UCAS, investors, landlords and the media have concentrated on the number of applications to universities but The Mistoria Group believe they should be analysing the number of applicants instead. An applicant can apply for several places at various universities and whilst the number of places being applied for has decreased, the number of people (applicants) applying is on the up; it has continued to grow year after year with an average increase of 6% over the last 5 years.
Tracey Jones, Senior Manager of Marketing & Business Development at The Mistoria Group explains, “Yes, the numbers of applications are down but this doesn’t represent the whole picture. These figures depict applications, not the number of applicants or available places. Research shows that each year university fees have risen, the numbers of applications have reduced only to return back to normal levels later.”
‘The increase in university fees and the reduction of places available has been widely reported but it is the applicant figures that are most interesting. There are some universities in the North West such as the University of Liverpool that have 8 applicants fighting to secure just one place; this demonstrates that there is still very much a demand for university places”, continues Tracey.
These numbers may provide some comfort to those who have invested in HMO properties or are thinking about investing. The figures have appeared to ‘level out’ over the last two years and Mistoria anticipate that the number of applicants will match, if not accelerate past those of 2011.
The lettings division of the Mistoria Group are currently achieving a 95% occupancy rate and predict a future demand for HMO properties. Tracey explains, ‘our success is due to providing desirable accommodation of high quality specification and in excellent locations perfect for students. Students, whether they are from the UK or are international, clearly expect the best. If you want to achieve high occupancy rates and the higher yields, your property really needs to step up to the mark’.
As property prices remain low, Mistoria have found an increase in activity from investors as confidence in the banks, stocks and shares remain depressed. Universities themselves are also heavily investing in student accommodation which is another tell-tale sign that the HMO market is here to stay and the future is looking bright.