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Student Property Investment Grows as Student Population Surges

February 2, 2011Article by Ray Withers

Student property investment is continuing to increase in profile as the number of student applicants continues to surge.

According to the latest figures to be released by UCAS the number of applications for places in the 2011-12 academic year (the last before the likely hike in tuition fees) increased by 2.5% compared to the previous year. Increases in overseas applications were even more striking with a 7.9% growth in applications from within the EU, and a 5% growth in applications from outwith the EU.

According to those involvement in student accommodation and student property investment, supply is already stretched and this will continue to worsen as the number of students increases at such a rapid rate.

Liverpool is known as a centre of excellence for UK higher education, with 4 of the UK’s best universities all in proximity to each other, namely: The University of Liverpool, Liverpool John Moores University, Liverpool Hope University and The Liverpool University of Performing Arts.

The combined student population of these universities is 53,000, with students from 100 countries currently enrolled. This is a staggering 12% of the city’s total population. According to Knight Frank’s 2010 student report, the city is also seeing the fastest growth in student numbers, with a 13% growth in student rentals between the 2008/09 and 2009/10 academic years.

The growth is leading to supply shortages according to those involved in the market, according to Property Frontiers, an investment consultancy currently active in the student property investment sector in Liverpool.

Basically developers are refurbishing buildings into student housing, investors buy what are called “student pods” to rent out to students. The investments are hands-free because the pods become part of the mainstream student accommodation availability, and this practically guarantees a high level of occupancy.

Property Frontiers are currently marketing the Oliver House development, offering student pods in range of 3 Liverpool universities from £43,500. The units are under the management of a specialise management firm, and yielding 9.5% net at 51 weeks occupancy. The development has a media room and a gym.

Slightly more expensive the firm is also marketing the Arena House development, offering student pods near the Liverpool One shopping centre from £45,000. The offer is basically the same, apart from the fact that the yield is 9.45% and the developer is offering a year one guaranteed rental bonus.

In the last couple of years student property investment has really risen to fame as a recession proof investment, because few can argue with the fact that student numbers rise during a recession.


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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