Student property is a desirable option for portfolio diversification and with the number of students in the UK set to climb by 500,000 over the next 10 years, the demand for accommodation is set for a big increase.
Why invest in purpose built student property?
When it comes to investing in any asset class, one of the main considerations will be a long-term demand from tenants, since this is a key indicator for rental growth and minimising void periods.
For those considering entering the student property market, property firm JLL has predicted that there will be an additional half a million full-time students at UK universities by 2030.
One reason behind the explosion of applications is the increase in the number of 18-year olds in the UK’s population.
What’s more, the recent drop in the value of the pound – mostly caused by the on-going uncertainty surrounding Brexit – is set to boost the number of applications from overseas. This is great news for student property investors as international students are the main demographic for private student accommodation.
Current student number trends
Although 2020 has seen many universities across the UK adapt their approach to teaching, with many moving to a mixture of online and in-class teaching, the number of students accepted into courses has not declined.
In fact, according to figures from UCAS, EU applications increased by 1% year-on-year, while international applications climbed by 9%.
In the time of a pandemic and on-going Brexit uncertainty, the evergreen nature of student property remains an in-demand property sector and with numbers expected to rise, there is plenty of scope for investors to achieve a long-term and reliable rental income.
For buyers looking to enter a student accommodation investment, towns and cities with more than one university and a low pipeline of PBSA development often provide the best returns, as there is less competition on the local market.
For more information about investing in student property, or to learn whether the asset class is right for your portfolio, simply contact Town Square Invest.