News

Follow our property market updates

Over a third of investors plan to expand their student property portfolio in 2016

investing in student property

Since 2011, student accommodation has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK.

A new report reveals that over a third of student property investors plan to expand their portfolios in 2016, despite the Chancellor’s new stamp duty measures.

The research, commissioned by The Mistoria Group, shows one in ten student property landlords say their HMOs enable them to offset the new tax rules and remain profitable and a further 50% do not believe any other asset class offers the same yields and return on investment as student property.

It appears that the new tax rules have not dampened enthusiasm for the student property market. While the rest of the buy-to- let market may be slowing down, the same can’t be said for student accommodation. The report shows that 35% of student landlords purchased HMO properties in the first quarter of 2016 to beat the new stamp duty rise and a further 43% of landlords plan to acquire between two and three new student properties over the next 18 months.

North West HMOs outperform BTL investments Mish Liyanage, Managing Director of The Mistoria Group comments: “Student accommodation can offer a number of attractive features to investors.  The yields are high as students settle for less space than other tenants; occupancy is typically very good; and it is neatly counter-cyclical, as more people go to university during economic downturns.

The student property is a robust asset class. Since 2011, student accommodation has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK. It has also continued to be one of the most resilient investment sectors, with rental incomes and property values remaining stable, or increasing.

The attraction of the student accommodation sector has been driven by structural undersupply and positive rental growth year on year.

This growth in student numbers is a great opportunity for landlords and investors to provide the right type of property that will attract lucrative students. Student accommodation has proven to provide better rental yields and there is an annual  market for new students. What’s more, the rent is guaranteed by a parent or guardian and is paid promptly.

A high quality HMO in the North West which will house four students, can be  purchased for just £160,000. The return on investment is very attractive too, with 13% – 8% cash rental and 5% capital growth.”

 

This article firt appeared in landlordtoday.co.uk / lettingagenttoday.co.uk / landlordnews.co.uk

Share This