The student housing market in the UK has seen exponential growth in the past decade, and it continues to attract investors due to its high return potential. With universities in the UK attracting students from all over the world, student housing has become an increasingly popular investment option. In this article, we will delve into why investing in UK student housing is a smart financial decision. We will help you find the perfect investment property for you here at Aventine Property.
- A Growing Market
According to a report by Savills, the UK student housing market has grown by 37% in the last five years, and the trend is expected to continue. The UK is home to some of the world’s most prestigious universities, and students from all over the globe come to study here. With the number of international students increasing each year, the demand for student accommodation is on the rise therefore student housing investment has become a popular investment option now. Moreover, students are now looking for high-quality and comfortable accommodation that offers a range of amenities, which creates opportunities for student housing investors to provide such properties.
- Low Vacancy Rates
One of the advantages of investing in student housing is the low vacancy rates. Students typically rent accommodation for a fixed period, and there is a constant inflow of students into the market each year. This means that the demand for student accommodation is constant, and investors are less likely to experience long periods of vacancy. Student housing have a low vacancy rate translates into a reliable stream of rental income for the investor.
- High Rental Yield
The rental yield for student housing is significantly higher than that of traditional residential properties. According to a report by Knight Frank, the average gross yield for student housing in the UK is around 6%, compared to around 4% for residential properties. This high rental yield is due to the strong demand for student accommodation, which allows student housing investors to charge higher rents.
Investing in student housing provides investors with diversification in their property portfolio. Unlike traditional residential properties, student housing has a different set of demand drivers, which means that it is less affected by market fluctuations. Additionally, student housing has a relatively short lease period, which allows investors to adjust their rents in response to market conditions. This flexibility provides investors with a buffer against market volatility.
- Strong Rental Growth
The demand for student accommodation is not only high but also increasing. As universities continue to attract more students, rental growth in the student housing market is expected to remain strong. Additionally, student housing investors can charge higher rents for high-quality student accommodation that provides a range of amenities, such as en-suite bathrooms, communal areas, and high-speed internet.
- Lower Transaction Costs
The transaction costs for student housing are lower than those of traditional residential properties. Investors can purchase student accommodation in blocks or clusters, which reduces the transaction costs associated with buying individual properties. Additionally, student housing often requires less maintenance, as most repairs are the responsibility of the property management company.
- Professional Management
Investing in student housing provides investors with access to professional management services. Property management companies specialize in managing student accommodation and have the expertise to deal with the unique challenges that arise in this market. These companies take care of tenant screening, rent collection, maintenance, and repairs, allowing student housing investors to focus on the financial aspects of their investment.
- Positive Social Impact
Investing in student housing can have a positive social impact by providing students with high-quality and affordable accommodation. Students are the future leaders of society, and providing them with a comfortable and safe environment to live in can contribute to their well-being and academic success. Additionally, investing in student housing can help to alleviate the shortage of affordable housing in the UK.
In summary, UK student housing is a smart investment option due to its growing market, low vacancy rates, high rental yield, diversification, strong rental growth, lower transaction costs, professional management, and positive social impact. More reasons here why student housing investment still makes the grade.