Home News Real Estate The History of the UK Student Housing Market

The History of the UK Student Housing Market

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The student housing market in the UK has emerged as a key asset class in the last decade and this trend shows no sign of declining. Despite the debts associated with studying and planned increase in tuition fees, the fact is the UK is in the grip of a recession.

Smart young people know that the job market is suffering beyond all belief and that entering the employment market at the moment, for all but the very fortunate will be a time of frustration. Many young people are taking to further education to get a good degree and ride out the worst of the market, after every dip comes a period of growth if you wait long enough.

UCAS says that demand for university courses is at a record high with nearly 700 000 applications the University received in 2010 – that was two years ago and now that number is expected to be closer to the 800,00 application mark. If in any doubt this increase in study has been on the upward trajectory for five years now, with student applications increasing an astonishing 34% in five years between 2005 and 2010.

Historically, growth in the student market has outperformed almost all other rental areas, supply and demand leading this assault on the private property market and the growing awareness that actually, tenants who are students are a good bet! The rental prices in the areas for students will tend to be higher and prevent rental wars dropping down the scale to secure good tenants. Student accommodation rents have experienced a steady growth and it is expected that they will continue to do so.

Any city or town that has or is close to a university will have a student population and this is a hungry market. Invest in a student property not only close the actually universities but those that offer good travel links to get to the place of study. Student life continues to be a social endeavour so close proximity to trendy restaurants and bars will always appeal to students.

There are also trends in the global mobility of students so while local students may not be quick on the uptake of your property if outside of a traditional student area of zone, there are a growing number of foreign students who will flock to accommodation that is marketed towards the student market place.

Keep your options open and any good central location can be made to appeal to the highly lucrative student market and it will be a worthy investment and addition to any property portfolio whether this is your first buy to let property or one of many.

Finally, there is some good news in the markets of the UK home for rent, demand is now outstripping supply. These points to a positive future for the owners that their property should continue to be in high demand and this makes an upward trend in rent increases viable. Renting is a necessity for some sectors of the populations.

But rents and having a good property in a good location is only half the battle for any landlord, any property standing vacant is a drain on your resources so that is why investing in property that targets a high need sector within property makes senses.

One of the consistent needs that all major towns and cities have is student accommodation, the demand is high and this keeps rents at optimum levels, it also results in much less frequent periods of property vanities and that means that your property is a genuine investment, consistently working hard for you.

Get better rental income from letting your property, do not think that students are bad news, high risk tenants; they are actually making some good decisions about their future. Following the recent economic downturn, many young people have decided to pursue a degree or higher qualification rather than entering the labour market where good jobs are in short supply. There are now 2.4 million students in the UK, many of whom will be looking to let a property and that is a very buoyant market to say the least!

Over the last nine months, there was a 45% increase in demand for student housing and the trend should continue. By tapping into this market, the owners of the students can expect to see a better return on their gross investment.

In general, rents are higher for student properties that you can buy a comparable property to let – often by as much as 10%. An owner with the right kind of property in the right place for students can expect better returns on their rental income. It is expected that demand for student lets in cities such as Leeds, London, Manchester and Sheffield will continue to increase, making these ideal places for owners of student suitable properties.

Any owner will tell you that one of their main priorities is to maintain unoccupied periods to a minimum. One advantage of letting property to students is that the house or apartment will have tenants all year. In addition, the owner will be able to prepare and agree the next let months in advance if the property will be required for the following academic year, allowing you to plan ahead.

Student property is hot property and if you don’t have a student property on your portfolio yet then you should seriously consider adding at least one, they are a great investment!

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