Looking at the strong yields you can make from student accommodation it is clear that this area of buy-to-let is very attractive from an investment perspective.
(PRWEB UK) 13 March 2012
It is no coincidence that the major banks are providing funding for the UK student accommodation sector say researchers at Colordarcy as landlords can make more profit from investing in student accommodation than the mainstream buy-to-let sector.
Colordarcy highlighted that landlords earn an average income of 6.45% from student accommodation when they let to cohabiting or married couples they earn just 5.94%. (Source: Knight Frank)
More good news for those investing in student accommodation is the huge demand for property means voids are of less of a concern than they are in other sectors. A regular supply of students in large university towns and cities means tenants are always ready to secure their property early to ensure they get the best ones available.
If a student let is in reasonable condition, demand will undoubtedly be there according to analysts at Colordarcy.
Colordarcy highlighted that returns on student accommodation in London nearly doubled year-on-year, with demand pushing up rents from 8.4 per cent in September 2010 to 15.1 per cent in September last year. (Source: Knight Frank)
This comes on top of the 5% per annum average growth over the last six years, compared to 0.6% for commercial property (Source: Knight Frank). So with yields being one of the most important concerns for investors in the long term student property is far more likely to pay for itself.
Loxley McKenzie MD of Colordarcy said, “Looking at the strong yields you can make from student accommodation it is clear that this area of buy-to-let is very attractive from an investment perspective. The chances are mortgage payments can be more than covered by the rental income, even the banks are now muscling in to invest and capitalise on soaring rents”
Student accommodation is the worst kept secret in property investment circles. In the coming years they will become even more attractive due to a combination of factors including student numbers are predicted to increase to 3 million by 2014 with more deciding to enrol than endure long term unemployment.
Rising UK rents can only increase the rent paid on student property which automatically increases with such properties in relatively short supply. These conditions should alert the investor to the huge potential of student accommodation in the UK in the long term.
There are 168 universities and higher education colleges in the UK which provides the investor with considerable choice. Researching a market is made easier because the potential areas to invest are already well known.
The West Midlands and Yorkshire, both regions that have several universities within their boundaries, offer the highest annual yields of around 6.5% (Source: Knight Frank). So for those serious about investing in UK property, student accommodation should be part of a property portfolio.
Notes to the editor:
Colordarcy is a leading property investment company that specialises in finding positive cash flow investment properties worldwide. Colordarcy investment property portfolio includes some of the best properties for sale in Atlanta, Brazil, Florida, Turkey and the United Kingdom.
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