UNITED KINGDOM
Why The UK ’ s Student Property Market Holds The Key To Investment Success
BY GILES BESWICK
L
ooking at the UK property market as a whole , it ’ s fair to say that it ’ s a good place to put your money – whether you ’ re funding your retirement or building a professional portfolio , property investment has become the go-to option for investors looking to earn an additional income stream .
Of course , the key to success lies not only in the country and location in which you choose to invest , but also the sector – it ’ s essential to consider what makes a property investment resilient through macro-economic changes .
In terms of sectors , it ’ s purpose-built student accommodation that truly stands out as one of the UK ’ s strongest investments at the moment , for various reasons .
The country ’ s universities are renowned across the globe for their quality of education , with 450,000 international students flocking there in 2016 / 17 alone . It ’ s easy to see why , too – 18 of the country ’ s higher education institutes are ranked inside the top 100 universities in the world and the prestige of such an education acts as invaluable currency when moving into employment .
In contrast to the UK offering some of the highest levels of university education in the world , though , the standard of traditional university accommodation has not kept up with the demands and aspirations of international students looking for a well-rounded experience .
It is this outdated supply and the rising demand for modern , purpose-built student digs that ’ s made the student property market such a worthwhile place to invest and fuelled the appetite among overseas investors , particularly those hailing from South Africa .
For years , South African investors – and those from other countries around the world – have headed straight to London when it ’ s come to buying property in the UK .
However , London prices fell by 0.6 % last year , according to data from Nationwide Building Society . But , interestingly , statistics released by Hometrack showed Manchester , Birmingham and Edinburgh having soaring house prices compared to other UK regions , with a growth of 7.3 %, 6.7 % and 6.6 %, respectively . This is part of a price correction going on to redress the imbalance in the UK economy as a whole , with regional cities catching up to the phenomenal growth that London has seen .
It ’ s important to remember , though , that it isn ’ t enough to simply earmark a location and hope for the best . Sector is key and student property is often a profitable route to take due to high yield potential and their strong performance in regional cities – creating the perfect formula for a sustainable income and future growth .
If we take Manchester as an example , it is home to two of the UK ’ s five largest universities , while the city ’ s four institutions attract 100,000 domestic and international students each year .
Despite this huge population , though , Manchester has one of the most undersupplied student property markets in the country . As a result , purpose-built student accommodation from private developers now represents 30 per cent of fulltime first-year undergraduate housing choices , up 22 per cent from just five years ago .
The UK student property market is truly one of the most important assets that SA investors should be shortlisting when looking at diversifying their wealth overseas and , in conclusion , one that they cannot afford to discount when looking at where to apportion their wealth .
For further advice on how to invest in the UK student property market , visit : www . selectproperty . co . za .
44 AUGUST / SEPTEMBER 2018 SA Real Estate Investor Magazine