Why the Student Housing Market is Still Appealing to Investors

By HopwoodHouse, 30 November, 2017

Despite the fall of the pound following the result of Brexit, the student property market still remains a worthwhile investment, based on the increasing numbers of students’ coming to the UK year on year, and the huge demand for student accommodation throughout the country. Demand for this type of property will continue to be very high for the foreseeable future, particularly as purpose built student accommodation still isn’t matching the ever-growing number of students. Therefore, investors are still very attracted to student property investments, proving to be a very strong part of their overall portfolio.

Why Choose the Student Property Market?

Although student accommodation investment is a solid market, an extremely considered approach is needed to ensure maximum profits and to minimise any risks. Investors need to be sure that they have a solid plan in place before investing, especially because of the seasonality of student accommodation. As students only require their accommodation through term time, it is important that precautions are taken to factor this in, in terms of periods of no occupancy and getting the property ready for future viewings.

As well as landlords moving from buy-to-let investments to student property investment, there is a gap in the market for investors to develop houses of multiple occupancy, particularly as university towns will always require high quality accommodation for their students. With this in mind, rent prices are rising year on year for this property type, and so, proving to be a worthwhile investment for investors, even in the current climate.

Investing with the Undervalued Pound

The UK has always been considered as a very stable market to invest in, with the UK being a popular place for overseas property investors to invest their money. However, since Brexit, the pound has weakened, and the rest of the world appears to have taken a step back from the UK property market as a result of this. Those currently owning property within the UK are now debating what would be best for them moving forward, and many investors have opted with a holding strategy, hoping for the pound to strengthen again. Those not applying a hold strategy are looking at ways to restructure their portfolio, and for many this involves looking towards different investment types.

Recent changes to the way in which UK property investment works, such as stamp duty changes, the removal of tax benefits and the introduction of capital gains tax, means that other property investment types, such as buy-to-let investments, are no longer a viable option to some. The strong demand, growing numbers of students and good profit levels that are associated with student accommodation is why many investors are turning their heads, especially as the weakened pound has less of an effect on the money that they can make through their investment when compared to other investment types.