New research has concluded that student accommodation is one of the UK’s leading investment opportunities due to the excellent rental return and opportunities for growth available.
report, compiled by the Mistoria Group, assessed the market and
established that student property remains an excellent investment
option, with high rental return and the potential for capital
appreciation driving market interest in the sector.
Following the surge of applications in
the wake of university place restrictions being lifted, the demand for
accommodation in the UK’s undersupplied student towns and cities has
risen rapidly. With universities struggling to provide accommodation, it
has fallen to the private sector to create new developments.
These purpose built student
accommodation blocks offer high quality student studio apartments and
rooms, offering students an alternative to the traditional student
‘digs’, becoming a more significant part of the market.
The region that has experienced the
greatest increase in rental return has been the North West. Reaching up
to 13% in the first three quarters of 2014, the rate is much higher than
the UK average of 6.37% estimated earlier this year and standing 5-6%
higher than the UK’s buy-to-let residential market.
The strength of the rental return and the rate of growth in the student market have led to the rate of investment in the sector dramatically increasing. According to the report, billion was invested in 2013, demonstrating that investors are continuing to see the student accommodation market as an excellent investment, with 2014’s total expected to surpass this figure.