Strike now on hotspot student lets – Searle

by: Barry Searle, managing director of mortgages at Castle Trust
  • 31/01/2019
  • 0
Strike now on hotspot student lets – Searle
More than 400,000 first year students will begin university in September and 80% of those students will start looking for accommodation by March, according to research by consumer watchdog Which?


So, if your clients want to invest in student accommodation, now is the time they should be looking for the right property to ensure they are not too late to meet the demand from the new intake.

University hotspots are lucrative for landlords.

Locations in areas with a high student population such as Nottingham, Liverpool, Manchester, Leeds and the North East boast some of the UK’s highest rental yields, according to Totally Money.

It put Nottingham at the top of the list with average yields of 11.99%.


Standards and rents rising

High yield does not have to mean low quality and the standard of student accommodation has been shifting steadily upmarket, according to research by student housing charity Unipol and the National Union of Students.

This survey found the average price of student accommodation in the UK has jumped by nearly a third in the last six years, with the average rental bill now taking up 73% of the maximum student loan, compared to 58% in 2012.

This is partly caused by an increase at the top end of the market, with studio flats now accounting for 9% of student accommodation, up from just 4% six years ago.

In fact, self-catered en-suite accommodation now accounts for the lion’s share of student accommodation with 58% of total rooms and only 17% of students living in traditional HMOs with shared bathrooms and kitchens.


Lenders meeting landlord demand

The report says that private sector investment now provides half of all student bed spaces, up from 39% in 2012, as a growing number of landlords have identified the opportunity in the sector.

Lenders have responded to meet this demand and there is now a range of flexible options to fund investment in a variety of student accommodation, from traditional HMOs to purpose built blocks.

September may seem a long way in the future, but opportunity knocks now for investors in student accommodation.




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