Gone are the days where you would find students living in drab dormitories and neglected halls of residence. Nowadays, students demand a higher standard of living, and their privately rented accommodation often boasts style, sophistication and class.
In recent years, the number of students seeking luxury rented accommodation has dramatically risen, and is expected to continue rising in the long term future. Students today favour convenience over price and are therefore willing to extend their budget in order to secure quality accommodation. Students are now looking for fully furnished luxury accommodation with everything under one roof – and that doesn’t just include bog-standard washing facilities – students want communal areas, gyms, cinema rooms and of course, free WiFi.
According to real estate consultancy Knight Frank, student property investment had increased by an astonishing 25% in the year 2017 alone, and experts predict that these figures will only continue to rise in the future. It is due to the lack of supply and rising demand, alongside the attractive yields offered that makes student buy-to-let property so popular amongst both investors and landlords alike.
There are now more students than ever before studying in the UK, and subsequently, this has created a demand for purpose built and privately rented accommodation that neither the government nor the council can cope with. This has undoubtedly left a gap in the now booming market, and investors have the chance to take advantage of the seriously lucrative benefits that luxury student accommodation has to offer.
It is near impossible to graduate from higher education without a pile of debt that is sure to follow you round for the rest of your adult years, and surprisingly this is one of the key reasons for the rising demand for luxury student housing. Students have come to terms with the extortionate cost of university living and instead of trying to fight the inevitable and live in squalor, students are becoming far less stringent on their housing expenses. After all, accommodation actually compromises a smaller proportion of the total living costs for students, according to Knight Frank.
Whilst some fear for the status of international students post-Brexit, the UK education system has not lost its popularity overseas, with foreign students compromising a modest one fifth of the entire student body, 41% of which reside in private accommodation. Overseas students massively contribute to the new and hybrid market, as the demographic typically seek luxury rented accommodation that is tailored to the needs and budgets of students.
For both professional and recreational investors alike, student property investment can be an extremely profitable opportunity, and is a great addition to any diverse property portfolio, offering a good alternative to traditional buy-to-let. Thanks to the changing attitudes of students and shift in focus, student accommodation is sure to create numerous different attractive investment opportunities for both landlords and investors here in the UK.
The student property sector has been recognised for its resilience during uncertain times in a volatile market. Punishing tax reforms and changes to mortgage interest relief had dampened investor enthusiasm for a long time, but could the rise of student property investment be the long-awaited change we have been holding out for?