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Modern Student Co-Living Investments


Are you thinking of investing in student accommodation for 2021 and beyond? With the growth of international students coming to study in the UK, and rise in UK nationals signing up for further education, investing in student property is on the rise. Over the years Investing in student property has proved a wise move for many landlords due to the low demands from students who have been more interested in location and number of rooms than fancy up kept homes. This along with the right location has lowered the risk of student property investment being left unoccupied, making it a secure income and investment for landlords. However over the last few years there has been an increase in the expected level of accommodation provided from private landlords, that along with new legislation such as section 24, and more recently Corona Virus pandemic has lead to a large number of landlords looking to sell up or find a more secure way of renting out their Student properties. At Brentor Property Group we have been working with investors to buy up run down & unloved student properties and transfer them in to Modern Student Co-Living properties, which not only look great but tick a lot of boxes for student and therefore have very strong demand.




Should You Invest In Student Property

If you are thinking of joining those benefiting, or questioning if student accommodation is a good investment, read on as we give you our guide to investing in student property in 2021. Selecting your type of Student Property - As a student property landlord you have two main options to consider when investing in UK student property. These are purpose-built student accommodation (PBSA) and houses of multiple occupation (HMOs). There are currently 177,000 HMO's in England, and if you are new to this type of investment, there are many rules and regulations that surround them. One of the main regulations are, that they are often licensed. This is a requirement introduced by the UK government to regulate HMOs regarding student accommodation. All student landlords must pay for a licence if occupancy is above 5 persons in two or more separate households, regardless of the number of storeys the property has. These changes are predicted to slow the number of investments for HMO's and push potential landlords towards a PBSA. Purpose Built Student Accommodation will be offered in two variations: cluster flats or studio apartments.The best investments for PBSA investments come from going directly to PBSA providers that select a mix of both for you depending on the location and market at time of purchase, to ensure your best returns. Choosing a student housing investment partner - When starting out and to help navigate the rules and regulations surround Student investments, it makes sense to choose an investment partner that specialises in student accommodation because their understanding of demand is useful when finding property that aligns with your own personal objectives as an investor. At Brentor Property Group we have spent many years researching our investment areas to ensure we know and have access to the best available options for both us and our investors. At Brentor Property Group we carry high ethics in regard to living wellbeing and environment of our properties. We have researched our tenants to get a true understanding of their demands and needs to ensure our properties remain on point with the current demands of tenants. By doing this you can ensure that we lower the risk and get our properties let successfully every year. Recent market growth and foreign investments - Student property is a very profitable asset class giving robust returns: according to a report by Savills, investment in student accommodation is forecast to rise by 17% this year. An increase in investment from last year to £5.3bn in purpose-built student housing is expected. There has been a large increase in the market share of foreign investment to 65% last year which is higher than in previous years. Singapore are leading the flood of investment with firms such as Mapletree and GIC, spending a combined £1.2bn on UK student housing in 2019. James Hanmer of Savills said student housing is a favourite investment in Asia as the “UK higher education is tangible for them and they can get their head around it easily”. According to UCAS figures, EU students represent only 6% of all full-time students in the UK, and therefore even in case of a harsh Brexit, there would still be a stable demand from UK students and other internationals. Increase in overseas students needing accommodation - The big issue on everyone’s minds is what the Brexit decision and the slow withdrawal of the UK from Europe will mean for the demand for University spaces and the number of UCAS applications. Despite the general level of uncertainty caused by the Brexit, the numbers of overseas students moving to UK universities to take advantage of the premium level education on offer and the favourable exchange rate is expected to increase further. In fact, according to research from Universities UK International, 91% of international higher education students across all levels were satisfied with their university experience in the UK, so it comes to no surprise that the UK has experienced a 2.2% rise in applications from overseas students outside of the EU. According to UCAS figures, EU students represent only 6% of all full-time students in the UK, and therefore even in case of a harsh Brexit, there would still be a stable demand from UK students and other internationals limiting the impact on student numbers.


Good returns on buy-to-let student property - If you are looking at buy-to-let in university towns you are moving in the right direction, however you must look at the locations that give the best returns as some are better than others. Thousands of students attend university in the UK and with 564,190 people applying to UK higher education courses for the 2017 cycle, most are in need of accommodation. This consequently raises demand and depending on the area, the rental price can start on average at £126 a week to £180 a week in locations such as Guilford, providing good returns. Strong demand for properties in university towns combined with a letting period of around 1 year, means that landlords don’t have to stress about finding new occupants. Simple Landlords Insurance published a league table stating which university towns will deliver the greatest returns. The university town where the future King of England studied, St Andrews, has ranked top in the listing. A large 6 bedroom house can be purchased for around £300,000 and with each tenant paying on average £600 a month, annual returns in this case are £36,000- a 12% annum return. Lancaster, Loughborough and Birmingham follow in the top 5 places to buy-to-let. Lowest return on investment has been found in Oxford, where properties on Iffley Road mainly occupied by students, on average cost £720,000 which offers a poorer 3.3% annum return in comparison.Strong demand for properties in university towns combined with a letting period of around 1 year, means that landlords don’t have to stress about finding new occupants When aiming to achieve these high yields, you must look into the standards desired by students who are willing to pay within the price bracket of approximately £600 a month. For instance, they require multiple plug points, high quality furnishings and overall clean and well-equipped finish. Modern facilities are increasingly important, and they must meet all required structural work to comply with housing, health and safety standards. These include securely fitted fire alarms and having smart meters installed. Pitfalls of investing in student housing If you are considering investing in student accommodation, there are some risks associated that need to be taken in consideration. Student rooms, otherwise known as student pods, represent a good opportunity for landlords with smaller budgets looking to climb up the student property ladder and receive guaranteed rent. However, a major disadvantage of student rooms is their resale value and capital growth potential. With a HMO, the property can be sold at any time on the open market through a reputable estate agent and expect a reasonable capital appreciation. According to The Mistoria Group, a leading student property investment specialist, selling a student room will not be as easy as “the value of property will fluctuate with the market and therefore the probability of finding potential investors is smaller than for other types of student accommodation, such as HMOs and flats”. If you are a landlord thinking to invest into student accommodation and expand your existing portfolio, it is essential that you ensure it is managed effectively!

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