Student accommodation is a massively growing alternative buy-to-let opportunity amongst investors. Student property is considered to be one of the best performing asset classes since 2011. With over 2.32 million full-time students in the UK, and 23% of students being international students, the demand for student property is expressively increasing. Especially given that universities simply cannot contribute enough supply to meet the ever-growing demand, student accommodation is considered a very savvy low risk investment for those looking for alternative buy-to-lets.
For the academic year of 2017/2018 alone, a total of 602,000 new spaces have been created for the increasing student population. 87% of these new bed spaces were funded by the private sector, proving a big space and consequently interest for investors within this alternative property market. It doesn’t stop there, the demand is constantly increasing as the international student numbers continue growing, with a 70% growth over the last 10 years. The increase in international students is a massive benefit to alternative buy-to-let investors, as they are essentially the students that are unlikely to already have a residence in the UK, thus driving demand for student accommodation to increase even further.
This high yielding investment can offer around 7%-9% returns on their investments in student housing. Additionally, student property investments are essentially considered recession-safe. This is due to the fact that during recessions, students still attend universities, thus supplying a constant demand for such properties. Care homes are considered to be an even higher recession-safe investment – follow the link for more information.
The benefits of investing in student housing also include the high demand within the market with the growing student population, alongside the fact that universities are unable to supply the demand. Furthermore, even if there isn’t much capital appreciation, investors will still receive a good return from rent.
This is also considered an investment with short-term returns, in most cases a passive stream of income. Moreover, rent is more or less assured, even if there are issues with the direct tenant, as students are obligated to register a guarantor when renting out student properties. This means that the returns on your investment are assured so long as the rooms are rented out.
If this is the kind of investment that you are looking to make, you may also be interested in investing in a holiday home. The reason for this is because furnished holiday lets are a great way to make an alternative buy-to-let investment, but with the added lifestyle option as well as lucrative tax advantages that FHL investments have to offer.