Here at RW Invest, we specialise in two types of UK property — student and residential. For those of you that are keen to find out more about the student buy to let market in the UK, read on for our detailed student property investment guide.
The buy to let student property market is thriving in the UK, now considered one of the best ways to secure a lucrative income through property investment. The popularity of student accommodation investment has grown significantly over the years, expected to be worth over £50 billion to the UK economy by the end of 2019.
Today’s students are now far more discerning than in the past, moving their attention away from typical shared student housing and leaning towards more high-spec accommodation. This means that property investors are putting their money towards student buy to let developments with luxury designs and features, and it’s definitely paying off.
One of the most important rules of how to invest in property is researching and deciding on the area you want to invest in. According to recent statistics and property market research, it’s time to look up North when it comes to student property investment.
Liverpool is considered one of the best places to invest in student property, and buying a student investment property in Liverpool has become a popular component of many investors strategies. With such a rich culture, thriving leisure and nightlife scene, and excellent educational prospects, Liverpool welcomes high numbers of students year after year, with a student population of over 70,000.
Students from all around the UK and overseas choose to study at Liverpool’s reputable institutions, including the University of Liverpool, Liverpool John Moore’s University, and Liverpool Hope University. Edge Hill University is also just a short train ride away from the city centre, based in the West Lancashire town of Ormskirk.
So aside from the high student numbers and resultingly high levels of demand, there are some other reasons why Liverpool makes the perfect location to invest in student buy to let. Liverpool is a city known for its attractive property prospects, boasting higher average rental yields and lower property prices than many other UK cities.
Many areas in Liverpool generate rental yields of over 7 per cent, including our City Point development which is based amid the £150 million Project Jennifer regeneration scheme and offers yields of 8 per cent. Located just a short walk away from Liverpool John Moore’s University, along with offering fantastic capital growth potential, City Point is the perfect option for those who want to buy an investment property near university campuses and ticks all the boxes for a lucrative venture.
Take a short train ride or a drive down the M62, and you get to Manchester, Liverpool’s Northern neighbour and another of the UK’s hotspots for student accommodation investment. Much like Liverpool, Manchester has demand for property on its side, attracting over 90,000 students across the cities institutions.
The University Of Manchester benefits from being the largest single-site university in the country, while the University of Salford makes another fantastic choice for student enrollments and offers a mixture of different course types.
With such high student numbers, the choices of student investment property Manchester offers are sure to attract high numbers of students seeking quality accommodation that’s well-located and equipped with everything they need. Those purchasing Manchester student accommodation should expect yields as high as in Liverpool, with some popular student postcodes such as M13 generating average yields of 6.89 per cent. Considered one of the fastest growing cities in the UK, those who purchase student property in Manchester are likely to benefit from an attractive rate of capital growth.
Investing in student property is an attractive prospect for many buy to let investors due to the affordability of these properties, the soaring demand for quality student accommodation, and the high average rental yields.
In the UK as a whole, and especially in Liverpool and Manchester, the number of students choosing to enrol in UK universities is increasing. Attending university is now a much more popular route to take, with record numbers of young people being accepted onto a university course in 2018.
Amongst these increasing student numbers includes those from overseas countries. The UK welcomed around 450,000 students back in 2016/17, currently boasting the second-largest group of international students in the world after the US. A recorded 91 per cent of international higher education students claim to be satisfied with their university experience in the UK. While overseas student numbers are already high, it’s estimated that the percentage of international students studying in the UK is set to rise by around 15 to 20 per cent over the next five years.
Rental yields are a major part of any investment, with higher yields meaning better returns for the investor. Student accommodation investment is cheaper to purchase than other property types, while the rental costs often remain high, especially with more luxury and high-end student developments. With such developments becoming more popular with today’s students, particularly those from overseas, tenants are prepared to pay higher amounts to live in accommodation that better suits their needs.
Renting an investment property near university campuses of a city is a good place to start to better your chances of securing high paying tenants and generating better rental yields. Along with being located near universities, however, the property should also be in proximity to other amenities like transport links and bars and restaurants, and preferably be within walking distance to the main part of the city centre.
Other qualities like high-speed internet, modern design and furnishings, and round the clock security and maintenance can also secure those higher-paying tenants and boost the rental income from your buy to let student property. Combine a more luxury property investment opportunity with a prime location like Liverpool or Manchester, and your chances of securing attractive rental yields become even higher.
By the end of 2019, the student property sector is estimated to be worth £53.2 billion — that’s a 72 per cent rise in value since 2014. With the student property market growing in value so rapidly, and the student population ever increasing, things are looking bright when it comes to the future of student property investment.
While there’s already a noticeable rise in the popularity and growth of the student property market, a rise in value for these type of investments is made even more likely in the north-west region. Liverpool and Manchester both benefit from some attractive rates of house price growth, with the north-west exceeding any other UK region.
By July 2018, figures revealed a yearly growth of 5.6 per cent in the region, compared to a 0.7 per cent year on year drop in London. Fast forward to 2022, and this house price growth is predicted to continue, with a 21.6 per cent increase in the pipeline.
Do you still have some questions about buy to let student property investment? Here are some common questions and answers to give you more clarity on your next venture.
If you’re interested in buying a student investment property, you need to research the area you want to invest in, and think about your budget and expected returns. The team at RW Invest are always happy to talk you through your next student investment and help you find the perfect opportunity for you.
There are lots of benefits to investing in student property instead of residential. The main benefit of investing in a student buy to let property is the affordability of student properties compared to residential investments, paired with highly coveted rental yields.
Figures show that student rents throughout the country have been growing in price by around 3.5 to 4.5 per cent year on year. When you buy a student property at a low price, such as our City Point development which is priced from just £59,995, the high levels of demand and increasing rental costs mean you benefit from some great yields.
Since you only rent your student property to one tenant group – students – things can be simpler than with residential investments where you could attract a wide range of tenants. Students have often been hailed as one of the best types of tenants to let to, as they tend to pay their rents promptly without missing any payments, especially if a parent or guardian is involved.
There are a number of benefits to buying off-plan student properties. This includes the fact that off-plan investments are often offered at a lower rate, and boast excellent capital growth potential, with a good chance of increasing in value even before the property is completed.
The prospect of off-plan student properties brings us back to the idea of this shift towards more high-quality accommodation with a luxury edge. New builds typically tie into this vision of luxury, since everything is up-to-date and state of the art, without any need for maintenance. Many students may be interested in staying in newly built accommodation, and since off-plan builds are as new as you can get, investing in an off-plan student property could be a great way to both attract new tenants and secure high yields.
Purchasing student property as an overseas investor is very popular. The UK receives thousands of enquiries from international investors every month, with 2016 reporting record numbers of foreign investment into student accommodation.
Buying property in the UK has a lot of benefits for overseas investors. Not only do you get to benefit from the chance to make lucrative returns from a thriving market, but the investment process is a lot more straightforward for international investors than in some other countries.
When working with a company like RW Invest, you can rest assured that your student investment is in the right hands. We can give you advice on how to invest in student property in the best way, offering information on our latest developments, providing experienced property management companies to aid your investment, and providing full due diligence with every step of the way.
Along with offering a wide range of residential properties, we specialise in finding the most exciting student developments in the UK. Here at RW Invest, we work hard to offer our clients the best student buy to let accommodation on the market, focusing on rental yields, location, and potential growth.
We work with both experienced and first-time investors from around the world on a daily basis, providing our network of clients with attentive customer care. If you’re ready to take the next step with buying a UK student property, please contact us today and begin your investment journey!
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