Arthur takes a look at the top reasons why you should invest in student housing.
Thousands of students attend university in the UK and with 564,190 people applying to UK higher education courses for the 2017 cycle, most are in need of accommodation. This consequently raises demand and depending on the area, the rental price can start on average at £126 a week to £180 a week in locations such as Guilford, providing good returns.
According to Savills, investment in student accommodation is forecasted to rise by 17% this year and an increase in investment from last year to £5.3bn in purpose-built student housing is expected. There has been a large increase in the market share of foreign investment to 65% last year which is a lot higher than it was previously. Singapore are leading the flood of investment with firms such as Mapletree and GIC, spending a combined £1.2bn on UK student housing in 2016. James Hanmer of Savills said student housing is a favourite investment in Asia as the ”UK higher education is tangible for them and they can get their head around it easily”.
Anticipated demand growth
Theresa May has recently mentioned the need to focus on what young people want and need which includes helping students with financing university and encouraging more to go is on the road map. Plans have been announced to raise the threshold from £21,000 to £25,000 when graduates start paying off their student loan. A proposed freeze on yearly fees of £9,250 a year had been announced at the Tory Party conference as an alternative motive to encourage students and not put them off University. This will greatly increase demand for housing if this action takes place and more student apply for university as a result.
The UK and Latin America lead the change in student housing growth in 2016 as there is this demand for purpose-built student housing.