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Look to regional cities not London for the highest student accommodation rental returns say experts

May 12, 2011Article by Ray Withers

A key asset class of the past decade, savvy investors are fast realising the double-digit attractions of the UK’s newest buy to let sector – student accommodation. It is however, according to the expert authors of the new Knight Frank Student Report 2011, the regional cities of England and Wales which are seeing the greatest rental growth, 4.1%, compared to historical leader, London, which recorded a 3.6% fall in 2010.

Ray Withers, Director of leading property investment agency, Property Frontiers which has successfully marketed numerous student accommodation projects in the city of Liverpool, comments,

“The returns that purpose built student accommodation can yield do vary geographically and the Knight Frank Student Report 2011 confirms this. In Liverpool, home to three of the country’s leading universities and some 53,000 students, rents in the last academic year, 2008/9 – 2009/10, increased by 13%, vastly exceeding the average 5% growth per annum seen nationally in the six years to 2008/9 (Knight Frank 2010).

“Furthermore with Liverpool’s universities expecting to attract high numbers of applicants for the next academic year, 2011/12, many from overseas, this regional city presents strong demand for student accommodation and in turn an attractive opportunity for buy-to-let investors.”

The Government’s radical reforms in university funding and student finance which will come into force in Q3 2012 will undeniably change the landscape of higher education in the UK in the coming years however the fact remains that more and more people from both home and overseas are seeking to attend university in the UK placing increasing pressure on both the number of places available and student housing stock.

According to data from the Universities & Colleges Admissions Service (UCAS) demand for academic courses is at an all time high with nearly 700,000 university applications in 2010, some 210,000 more than the undergraduate places available with a “significant” rise in demand from the EU, the Far East and Hong Kong between 2010 and 2011 reports Knight Frank (2011).

With ever increasing numbers attending university the pressure on existing student housing stock has never been greater. In their 2010 report Knight Frank states that the supply of new student accommodation remains limited with the vast majority not having access to private rooms. And it is this discrepancy between the supply of accommodation and demand for bed spaces which, as James Pullan, Head of Student Property at Knight Frank says, is “at the heart of the student market’s appeal”.

For those considering investing in student accommodation double-digit returns can be expected but it is essential to select only the finest opportunities available – accommodation which meets the ever increasing expectations of today’s student population, namely location, facilities and privacy.

The latest, most prestigious student accommodation project available through Property Frontiers, Hatton Garden, meets all of these key criteria being located in the heart of the city, only minutes from John Moores University, Lime Street station and all the shops, restaurants and nightlife students desire.

The 98 private en-suite student rooms with flat screen TV and internet connection are more spacious than others in the city, housed within a refurbished early 19th century building. On-site facilities will be first class with ample kitchen space, communal lounges with 42 inch flat screen TVs on each floor, an on-site gymnasium, computer/media service centre, management office and laundry facilities.

Rooms are available at £48,000 and investors can expect double-digit returns of 10.03% NET, the first year assured. Monthly rental income is guaranteed to be paid from 1st March 2012. With units already selling fast contact Property Frontiers today on +44 (0) 1865 202 700 for more information about investing in student accommodation in Liverpool – a key asset class in 2011.


Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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