Student accommodation investment is the United Kingdom’s top performing asset class and it has been for 5 years, outdoing the residential property sector as well as the broader commercial sector. This asset class is such a success in the UK because it is known for many world-renowned universities.
There is a particular interest from international students, who move to the UK to study as well as international investors predominantly from Asia who see the massive potential in this lucrative sector.
London, Liverpool and Manchester are the typical areas for student accommodation investments. Whilst these areas were booming in this sector a few years ago, they are now slowly becoming over-saturated with Purpose-Built Student Accommodation (PBSA) and yields are slowly declining.
From an investors perspective, in order to build and sustain a good property portfolio, you need to target areas that are untapped. Here is a list of the predicted UK PBSA hotspots of 2018.
Huddersfield is an up-and-coming area for student property investment. As well as being crowned one of the best city in the UK for international students, there is also an undersupply of PBSA by 76%. This is great news and show the potential for growth in the medium to long-term. For less competition, high demand, low supply and high yields – invest in a student accommodation in Huddersfield.
This area is one that would probably go unnoticed by many investors, however it shouldn’t be left out. Glasgow is the home of over 109,000 students, making up around 13% of the city’s overall population. As well as having multiple universities in the area, the supply of PBSA also soared during 2017, with many new projects launching to house the high number of students. For high demand and returns, Glasgow is definitely one to keep an eye on.
Bradford is the UK’s 4th largest metropolitan district with a strong reputation for top performing academic institutions. In fact, there are plans to increase university student acceptance numbers in Bradford by 30% by the year 2024. The reason why this area is good for student accommodation investments is because there is an under-supply of PBSA as only 17.6% of students in Bradford have access to these properties. Therefore, investing in this area for will give you a sustainable investment with a lot of potential for growth.
Student property is a profitable investment for investors who want to create a diverse and sustainable portfolio. Relying on buy-to-lets is becoming less favoured by investors as house prices spike and yields are squeezed, therefore a specialist commercial investment such as one in the student sector is a good alternative.