Five hot spots for student property investors

With the continued rise in perceived unpredictability and expense of the residential property, property used for student accomodation is becoming a popular investment choice in the UK, according to UK property investment consultancy Emerging Property.

Though the UK has a student population of 2.3 million, there is currently only enough living space to house 26% of them. While some students will continue to live with relatives throughout their higher education experience, there is a definite need for the development of more student accomodations.

The Financial Times reports that students rooms have been the highest investment yield for the past six years, with an increased number of passive investors, who choose this form of investment due to the relatively low cost, the ability to manage from a distance, with little effort aside from basic upkeep, and a high guarantee on income generation.

The government also helps to encourage dedicated student accomodations, by classifying this as commercial property that is exempt from stamp duty, below the £150,000 threshold. 

On 30 May Emerging Property released a list of the top five UK towns that show the best potential for investors. These towns were chosen by looking at the level of student accomodation undersupply alongside the anticipated level of yield for student accomodations in that area. The top five towns are as follows.

1. Bradford

The university has plans to increase student numbers by 30% as soon as 2024, with only 17.6% of the student population in a dedicated student accomodation.

2. Huddersfield

While rated the best in UK for international students that current student accomodation deficit is at 76.5%.

3. Leicester

When considering the £190 million being invested in Leicester University, and the expansion in student demand that will likely follow, there is estimated to be a ratio of at least 6.4 students per dedicated room.

4. Loughborough

While the university is considered one of the most popular stated preferences for UK students, there is a long term prediction for high student demand, student population growth as well as currently having a critical state of having a housing undersupply.

5. Stoke-on-Trent

As the 2nd fastest growing economy in the UK outside London, over the last five years, Stoke-on-Trent has over 22,700 students with the current undersupply of dedicated student accomodation at 79%.

James Harrington, business development manager at Emerging Property, commented: "These properties are professionally managed onsite 24/7, meaning that all the hassle of traditional buy-to-let landlordships is taken out of their hands - letting, vetting, maintenance, repair and rent collection. Once you've signed the contracts, there's nothing more to do."

For their ease and low level of investment per individual investors, it's likely that student accomodation property will continue to be sought in the UK.