The student rental sector continues to grow and is becoming increasingly attractive to UK expats investing in specialist mortgage products.
MANCHESTER, GREATER MANCHESTER, UK, Sept. 19, 2022 /EINPresswire.com/ — As many students start or return to university this week to start the 2022/23 academic year, Liquid Expat Mortgages examines the growing popularity investment in student accommodation (PBSA).
What are the current conditions in the student rental market?
Students’ appetite for studying in the UK is incredibly strong. In the 2020/21 academic year, the UK’s full-time student population grew by 8%, with UCAS applications in 2021 reaching a record high of 750,000. The year also saw the second highest number university acceptances – 560,000. According to Savills, students’ desire to study in the UK and these record numbers mean there will be 1.75 million full-time undergraduates in the UK in 2022. It is clear that figures like this mean that there is a huge demand for students. lodging. And this demand cannot be met by universities, forcing private sector investors to fill the gap in student housing. The number of investors in the PBSA sector reflects this, with investors spending £4.1 billion in the PBSA sector in 2021. This presents a great investment opportunity for UK expats and overseas domestic investors to take advantage of this incredibly popular and lucrative sector of the UK rental market.
Why should UK expats and foreign nationals invest in student property?
“Investing in purpose-built student accommodation is a great way for UK expats and overseas domestic investors to start or add to an existing property portfolio,” says Stuart Marshall of Liquid Expat Mortgages. “This is largely due to the huge demand for student rental accommodation and the lack of available supply offered by universities.”
The growing demand from students has contributed to an incredible growth in the student rental industry. Like the long-term rental sector, a mismatch between supply and demand has meant that some areas – such as the East Midlands – have seen student market rent growth of 26% over the last five years. years. The North West and Yorkshire and the Humber also saw impressive growth over the same period, increasing by 23% and 21% respectively. And with Savills reporting continued increases in student numbers and student applications, UK expats and foreign national investors investing in student accommodation using UK expat or foreign national mortgages should make huge profits.
“Student residences are also attractive to UK expats and foreign national investors for their accessibility. Student accommodation is generally more affordable than a more conventional long-term rental. This is good news given the increased affordability criteria that come with mortgages for UK expats and foreign nationals due to slightly higher interest rates. Additionally, it also makes it a good candidate for diversifying an investment portfolio of UK expats or foreign nationals. For example, an existing UK expat and overseas investor could choose to remortgage an existing property, lock in a lower fixed rate in the current rising interest rate climate, and also raise additional capital to invest in student property. and simultaneously capitalize on one of the most profitable sectors of the UK rental market. This is often a great investment decision, especially as many student rental properties consistently achieve returns of over 8% for UK expats and overseas domestic investors.
“One final thing to add about student property is that it is often a very favorable choice for UK expats and overseas domestic investors looking for a fairly convenient investment. Indeed, many student property investments are managed by student management companies that will take on many of the traditional landlord responsibilities that come with more conventional buy-to-let property.
Where to invest?
Using the Savills PBSA Development Chart, it is easy to see where areas of interest might lie for UK expats and overseas national investors interested in the student accommodation sector. When investing in student accommodation, it is important to try to find an area with the following attributes:
– Strong growth in student population
– A high pupil/bed ratio
– A limited flow of new beds
This will ensure that the investment property is likely to remain profitable for many years to come, as it shows demand from students to study there and a mismatch between supply and demand of available student property which is expected to continue.
Bristol has seen an annual undergraduate application growth of 0.6% and moved up to the top tier of Savills PBSA, due to its continued popularity among students and the university’s well-documented difficulties in locally accommodating students from first year. Other areas that stand out in the Savills PBSA development chart are Bath, Birmingham and Manchester. The year-over-year percentage growth in undergraduate applications for these fields increased by 4.9%, 5.4% and 4.6% respectively, all incredibly strong growth figures and showing a desire serious for students to study there. Birmingham and Manchester are also particularly noteworthy, as these areas already have some of the highest numbers of full-time students in the country at 72,505 and 66,155 respectively. Of course, the location of the investment will vary depending on many factors. , especially if it is only a rental property for investors or if it is part of a larger portfolio. A UK expat or overseas mortgage broker will be best placed to help UK expats and foreign nationals decide which route to take, as well as helping to get the best possible mortgage deal and making the buying process as smooth as possible. fluid as possible.
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