Student Property Investment – FreshStart Living Reveal Why Student Properties Are So Attractive to Buy-To-Let Investors

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As a report from a leading property advisor shows that student property investment in the UK increased by 50 per cent in 2011, affordable student property developer FreshStart Living, reveal the reasons why student investment properties are in such high demand.

FreshStart Living

FreshStart Living

Interest in student property is fuelled by the high demand from students, minimal void periods and the strong yields that student properties can generate.

According to CBRE’s quarterly market review in Q1 2012, £1.15 billion was invested into student properties, marking an increase from £774 million in 2010. The review also revealed that £246 million has been invested in student property in the first quarter of 2012.

Industry experts believe that interest in student property investment is fuelled by the high demand from students, minimal void periods and the strong yields that student properties can generate.

FreshStart Living specialise in developing student property in the UK which it then sells on to investors in the UK and overseas. The properties are sold to investors at below the market value and are situated in popular student locations across the UK.

The Salford-based company currently have student developments in Manchester, Bradford and Greenock, Scotland.

It is thought that popularity in student property amongst investors hasn’t reached its peak and FreshStart Living has put together five reasons why student property investments are so attractive to investors.

1. Minimal Voids.
Students to sign tenancy agreements for 9-12 month periods to coincide with their academic years, so property investors are guaranteed rent for a fixed term and can begin looking for new tenants for the next academic year up to six months in advance. This minimises voids. What’s more, students are well known for actively seeking out property and will sign up months in advance and even pay a deposit without the need for incentives like rent free periods with the fear that they won’t find accommodation and be left in university owned halls.

2. Armchair Property Investment.
Investing in student pods in private student halls of residence means that on site management teams will handle all maintenance and any problems that may arise with tenants. This means that buy-to-let property investors won’t need to spend time managing their investment properties and can sit back and collect generous rents.

3. Savvier Students.
It has been found that the increase in tuition fees won’t affect the numbers of students going to University, but it will force the students to be more savvy about where they choose to stay. Rather than staying in University owned accommodation charged upwards of £110 per week for a room, students will choose to stay in privately owned halls which are more affordable. If an investor can charge rents of £80 per week, whilst still generating a high yield while their nearest competitor is charging £110 the students will most likely choose the affordable student accommodation. That’s an extra £30 in their back pocket every week.

4. Shortage Of Supply.
It’s the simple supply and demand equation. There is a shortage of student accommodation in general which means that investors experience high demand. For the start of the student accommodation year in 2011 some universities were forced to make students live in holiday banks, with some taking the drastic measure of installing bunk-beds in rooms. It’s no secret that there isn’t enough accommodation to go around, but what’s more, there is an extreme shortage of affordable student accommodation. If an investor has invested in affordable student property, then they can tap in to a larger market and experience high demand which leads to better yields and minimal rental voids.

5. Increase in Overseas Students.
International applications to UK universities is growing and is expected to continue to increase as studying in the UK becomes more and more attractive to overseas students. Universities across the UK tend to charge higher tuition fees to overseas students and are investing significant amounts of money to market their universities abroad which will lead to an increase in students and a higher demand for student property. According to UCAS figures this year, applications outside Europe grew by 12 per cent year on year. The largest application figures came from Hong Kong at 37 per cent and Australia and 15 per cent.

If anyone is interested in finding out more about student property investment visit

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Matt Dyas
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