Student Property

The student property investment market has developed considerably over the last decade and with the number of students in full-time education continuing to increase year-on-year, investment in UK student property is now regarded as an important part of investment property strategy.

Over the last 10 years there has been a significant change in the student property market, with more and more students moving away from the traditional House of Multiple Occupancy model and more towards apartment-type, purpose-built student accommodation (PBSA) in city centres.

As always, location plays a vital part in establishing investment growth potential and we give due care and attention to which student cities perform best across the UK as we introduce student property investment opportunities to investors.

The UK Student Property Market

In May 1992, there were 984,000 students in full-time education. By May 2016 there were 2.26 million – an increase of more than 120% and accounting for approximately one in every three people aged 18 to 24 being in full-time education.

Due to this ever-increasing demand rents for the UK PBSA sector have increased by 2.55% on average for the 2017/18 academic year.

Key Investment Information

  • Fixed medium term yields of between 7% and 9% per annum
  • Entry level usually from £60,000 to £70,000
  • Strong potential for capital growth
  • No Stamp Duty
  • City centre locations
  • Investors receive UK Land Registry title deeds

Sources:

  1. How has the student population changed by ONS Digital 20 September 2016
  2. https://www.moneywise.co.uk/alternative-investing/investing/guide-to-investing-student-accommodation
  3. Knight Frank’s UK Student Housing Rental Update 2017

Percentage of full-time students unable to access PBSA

Knight Frank produces an annual report ranking UK cities in terms of their current and future supply/demand for PBSA, highlighting the university towns where there is a shortfall in accommodation and student numbers are robust. Results are shown in the table below:

Glasgow78%
London70%
Bristol66%
Birmingham65%
Manchester64%
Southampton64%
Cardiff63%
Aberdeen62%
Newcastle upon Tyne62%
Exeter60%
Leeds60%
Sheffield60%
Edinburgh59%
Nottingham59%
Durham58%
Leicester53%
Liverpool49%
Coventry47%

Source

  1. Knight Frank Student Market Review 2016.

Specialists in Property Investments