University students in class

Student property investment sees its second biggest year in 2016

A property investment sector rapidly increasing in popularity as an alternative to residential buy-to-let, student accommodation saw its second biggest year in 2016, with an estimated £3.1 billion worth of investment.

Demand for student accommodation in the UK has continued to increase. In 2015, the government lifted the cap on the number of student places universities could offer. Since then, UCAS have reported that the number of applicants have increased 3% year on year – now reaching a record high, with approximately 493,000 students placed for the 2016/17 academic year.

Along with student numbers, UK universities and their facilities are also continually improving and, as such, we have seen the emergence of a new, much more discerning student population. This has proved good news for investors in high quality Purpose Built Student Accommodation (PBSA).

Students are leaving behind the run-down HMOs (Houses of Multiple Occupants), and instead opting for high-quality PBSA in close proximity to the university campus; prompting more and more investors to shift their focus away from houses, and towards this new generation of student property.

Savvy property investors have for many years been turning to alternative assets in search of higher returns and a hands-off, hassle free proposition not available within the traditional residential market. Increasing demand from students across the world has positioned student accommodation at the fore of the alternative assets marketplace. According to Property Investor Today, student accommodation has outperformed all traditional property assets and has been the UK’s strongest growing property investment market since 2011.

The sector has proven to be resilient to change and therefore has attracted investors time and time again. The global financial crisis proved to have minimal negative impact on the number of students attending university, while OPP.Today also recently forecast that student accommodation would be one of the investment markets least susceptible to the fallout from Brexit.

With these factors in mind it seems clear that confidence in student accommodation investment is well-founded, as this sector will prove to be a lucrative investment market for many years to come.

View our student accommodation investment opportunities.