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Student Property Investment Offers Established Tenant Pool

June 19, 2011Article by Ray Withers

Student property investment is the new black in the UK right now. Even though the UK is, by all accounts, amidst a residential rental (buy to let) boom of magnificent proportions, student property investment is still managing to grab its fair share of the headlines, and rightly so.

Right now, even though the positive reports drown out the negative, there are still plenty of UK landlords who are wondering what all this talk of a boom is about. It seems at first like a north south divide, but actually it is a case of who has chosen the best properties, good locations but good areas as well, low crime, nice neighbourhoods, good transport links etc etc etc. Those who have really done their homework are experiencing exceptional demand right now, those who haven’t continue to fight for the next tenant. Sorry to those who feel this is unfair.

“No rental boom here in Edinburgh. Market rent has dropped about 10% since 2008. This was before the LHA changes,” says landlord JOANNA CAROLINE, on the Property Tribes forum. 

The forum post in question is one specifically asking about the rental boom, to find out if it is country wide. Those not experiencing a boom tend to mention LHA in their posts, which is a volatile market.

Meanwhile, another landlord, Lisa Orme on the same forum reports a strong demand throughout her portfolio, she says:

“Our properties are spread across Coventry, Warwickshire and South Birmingham and we can’t let them quick enough. Constant calls from letting agents begging to take them on and all reporting a major lack of stock. We aren’t racking up rents with existing tenants but on vacancies they’re going up.

“We just had a property come empty in South Birmingham and neither us nor the agent had advertised it but the agent still had 14 calls from people who’d heard it was going to come available!”

Enter student accommodation stage left. Right now we are seeing a new type of student accommodation investments coming onto the market, called student pods. These are self contained studio flats, in complexes that have either been built or refurbished so as to specifically cater for students. What’s more they are always located in range of a city’s universities and colleges, and more-often-than-not are part of the mainstream accommodation at one or more universities.

The whole point of doing the research to find the right property as laid out above is to get a property with a ready-made pool of prospective tenants. When you invest in a carefully chosen (yes, you still need to do your homework) student property investment you buy into an established rental pool, often with calculable occupancy, and therefore calculable yields. The yields average 6-10%.


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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