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Despite the clear benefits to the student market and its potential, it is evident when investing in student accommodation that some areas are better than others for the future. For the investor looking for the perfect spot in terms of student buy-to-lets, here are some of the best places to invest in student accommodation at the moment. Each is categorised in terms of student draw, student accommodation investment yields, and the potential for capital appreciation in time.

For information on two of the key areas for student property investment at the moment, Liverpool and Manchester, take a look at this short student property investment guide. Host to some of the best universities in the UK, these buy-to-let hot spots are full of ongoing property development, and so are perfect for those thinking of investing in student accommodation.

Best Student Property Locations Guide
Best Places For Student Property Investment Guide

Is student accommodation a good investment?

Looking to make money from student accommodation is a good investment strategy for buyers, as the UK market is thriving at the moment as demand continues to rise. Student accommodation investment yields are typically high, and owning a student rental property in a prime area can benefit potential capital appreciation.

Not only is investing in student accommodation a cheaper option for first-time investors looking to form the basis of their property portfolio with a student apartment build, but experienced investors looking towards varying areas of the country will find that they can diversify their portfolio efficiently with manageable, clustered apartment blocks that promise shortened void periods. Vs residential buy-to-let, student buy-to-lets are one of the smartest asset classes investors can choose to go for, as they can expect a higher average return.

Void periods refer to the period of time in which your property is without a tenant, and so you aren’t making monthly income through rental payments. When relocating to a different city, University students will plan out their student housing typically months in advance, therefore it is easier for those investing in student housing to manage their property. Providing your property is located well and attractive to tenants, the colossal demand for student housing will also help to ensure a fast occupancy. Knight Frank estimated that within the UK’s student base, demand for purpose-built student accommodation outstrips the supply by 3:1. This explains the increasing demand of developments in major university towns and cities across the country, strengthening the surrounding areas and preparing for the growing buy to let student population of the near future.

Best Locations For Student Property Investment

Student property investment Liverpool

While a lot of excitement on Liverpool’s heatmap may emanate directly from the city centre, the potential of the property market is also thriving and spreading across other points of interest within the city’s radius, building up a wide network of investment opportunities for investors looking to the future. The Baltic Triangle area, for example, neighbours the education sector and has an exciting thriving community of tech startups and business, generating employment for those wanting to stay in the city, and attracting university students that want to work in the growing digital field going forward.

Another prevalent area that shows promise for the future is the Wirral area, the focal point of the £1bn Liverpool waters regeneration project. Looking to in part emulate the growing success of the Baltic triangle, it will provide a creative space for university students and an incredible investment sector opportunity for those looking to make money from student accommodation. With Liverpool’s educational sector and the city centre easily accessible by train, and yet distanced far enough away from the city to be a separate entity, the area provides a viable alternative to Liverpool’s door front.

Liverpool student rental yields

Wondering what is a good rental yield? Liverpool’s rental yields are some of the best in the UK at the moment, and the North West, in general, is one of the best places to choose if you’re an investor looking for high rental returns. Liverpool student rental yields in two of our property offerings, for example, City Point and Poets Place, feature an 8% NET rental return for two years.

Liverpool student property investment Liverpool – Tenant demand

Liverpool’s tenant demand is surging at the moment, and as an increasing number of young people travel off to University, it is an increasingly attractive area. The University of Liverpool offered 919 different courses to students this year, the most of any in the Russell Group University league tables.

The major pockets of the city’s 55,000-strong student population in Liverpool are largely within Smithdown road, Kensington, and the city-centre itself. As city-living becomes more popular, however, the interest in luxury, purpose-built student accommodation with direct links to the city is beginning to grow, as the UK’s student wants modern apartment space with ease-of-access to the Universities around them.

It is also worth noting the international ties that Liverpool has in its student property market at the moment. The University of Liverpool, for example, has prevalent Chinese ties with a sister school located in Shanghai. Of the approximate 35,000 University students that attend the Redbrick University, around 8,000 of them are international students. In the face of Brexit, it is expected that the number of international students coming to the UK to study will continue to increase healthily. It is not a surprise that property sales and the UK’s student market will benefit from these students, as the country has some of the best universities in the world.

For students, alongside the high achieving Universities on the doorstep of the city centre, the cultural draw and prestige of the city is also a hugely attractive factor. Not only was the city the first in England to be named the European capital of culture in 2008, but the waterfront (again a prime spot for those looking to invest in student properties, due to the Wirral area) has earned the city a UNESCO world heritage site status.

north south divide

North Vs. South – Comparing London to student property investment Liverpool and Manchester

Despite being the capital city of the country, and harbouring undeniable global influence, London may perhaps be an investment spot to avoid if looking to efficiently make money from student accommodation.

With regard to the Brexit situation, as Boris Johnson and his new government attempt to come to some sort of mutual agreement in Parliament for leaving the EU on Halloween night, it seems that ultimately it will not have too much of an effect on the property market going forward. However, it would be untrue to say that Brexit trepidation hasn’t had somewhat of an effect on the London property market, and many blame the political issue for stagnating house prices and disinterest in the student market.

One of London’s primary draws was once its vibrant and eclectic atmosphere, and its opportunity for young people to get experience in a field they want to work in by travelling to the big city. However, with projects in motion such as the Northern Powerhouse, rail and travel developments, and regeneration (such as the ones in Liverpool mentioned above), the city is beginning to lose its unique draw for education and work, with many other cities offering the same sort of experience at a cheaper cost.

Liverpool Student Properties
Manchester Student Opportunities

Student property investment Manchester

A powerful secondary option the UK’s capital, Manchester’s growing student population is the largest in the entirety of Europe, and with a demand for student housing that outstrips the current supply, the student investment market shows incredible potential for the future. Across the different Universities in the area (including the University of Manchester and Manchester Metropolitan), there are over 99,000 students, and thus an incredible amount of potential with regard to investing in student housing.

Student property investment Manchester – Tenant demand

Much like Liverpool’s growing digital sector, Manchester’s thriving technology hub is a certain draw for students looking to graduate into the city. In fact, many businesses are already beginning to ‘north-shore’ and uproot themselves upwards for work, as the city tends to afford a much more affordable and comfortable standard of living than in the expensive capital.

Manchester’s reputation as a growing northern hub in the UK and a viable competitor to the country’s capital is garnering worldwide attention. Again, with regard to the international interest, in 2018 it was reported that Chinese buyer enquiries had increased by a huge 255% year-on-year, with Liverpool behind at an also impressive 160% within the same period. For comparison, London was down on enquiries in that period by almost 49%. These figures are indicative of the continuously growing influence of the North West as a student accommodation investment yields UK powerhouse, and combining that with the prevalence of Manchester as a student city and the incredible demand for housing, student property investment should be a surefire consideration for buyers.

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