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UK Student Accommodation Leads The Returns Race Outperforming All Commercial Property Classes

February 9, 2012Article by Ray Withers

Performing exceptionally well as an asset class compared to traditional investments over the last year, student accommodation in the UK has outperformed every other commercial property class, supplying regular returns throughout the economic crisis according to the latest Knight Frank Student Property Report 2012.

The report highlights that student property returns averaged 11.5% in September 2011 and although slowing from 13.5% in the previous year, still continues to lead the returns race in the market among commercial asset classes thanks to a structural shortage of purpose-built student accommodation in the UK combined with increasing global interest in the UK’s high ranking educational institutions.
With this in mind, the just released Knight Frank report identifies further rental growth in the student accommodation sector this year with James Pullan, head of student property at Knight Frank explaining that while London returns almost doubled to 15.1% in September 2011, taking average total returns to 11.5%, student accommodation in the regions outside of London is also robust with investment in towns which have more than one university along with a high density of students such as Liverpool, being the most lucrative.

In addition Knight Frank highlight that the UK is well placed to take advantage of the growing influx of overseas students into the UK, predicted to double by 2025 thanks to having 5 universities which are ranked in the world´s top 20 universities as well as reduced study costs for international students, derived from the weakness of the pound.

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

“Home to three leading universities – The University of Liverpool, Liverpool John Moores University and Liverpool Hope University which have seen significant increases in applications over the years along with highly regarded English language schools such as LILA in the heart of Liverpool city centre and cheaper prices than London, Liverpool is one such city that perfectly accommodates the needs of higher education students.

“Liverpool presents the optimum buy-to-let environment for investors who will be able to reap significant returns from strong demand. In fact the Knight Frank Student Property report 2012 identifies that average rents for apartments and en-suite rooms in the regions such as Liverpool rose by 4% with total returns of around 10.5% last year so the benefits speak for themselves.”

With demand continuing to outstrip supply as increasing numbers of students from both home and abroad seek to attend universities in Liverpool, increasing pressure is being placed on the housing supply with the emphasis now on building new high quality private student housing developments such as Gradwell Street, central Liverpool.

As a student accommodation development offering en-suite rooms from only £48,000 with only 8 en-suite units remaining, Gradwell Street, adjacent to Liverpool One Shopping Centre and only minutes from Liverpool Lime Street station offers investors a 10% NET yield – assured in year 1.

At just £2,500 to reserve with only £30,500 to pay in April 2012, Gradwell Street is superior to other projects, combine great value (under £50,000) with larger en-suite luxury facilities right in the heart of the city.

For more information contact Property Frontiers on +44 1865 202700.


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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