Healthy Future for UK Student Housing Sector!As UK residential property prices continue to drop, investors are advised to turn their attention to a buoyant student accommodation market, as an assured way to expand and diversify their portfolio, says Samantha Jones, Head of Marketing at Knight Knox International.
Jones, recently appointed to head up the marketing team at the property investment firm said that investors could be forgiven for thinking that the student accommodation sector was an unfamiliar choice, particularly in light of the recent governmental changes in regards to how universities are allowed to run.
“The UK is currently ranked third in the world for the price of tuition fees for overseas students, highlighting the need for universities to package their courses and institutions more attractively. Recently published reports on this sector have highlighted how, instead of a decline in student numbers, universities are experiencing an overwhelming amount of applications, something that their existing facilities cannot cater for.“
The private sector currently accounts for approximately 40% of all UK student housing needs, as universities increasingly find that they cannot keep up with the demand for affordable accommodation. Recently published research by residential property experts Knight Frank indicates that approximately £500m will be generated by universities over the next five years, due to the disposal of their existing halls of residence to the private sector.
Jones pointed out that the UK student accommodation market accounted for more than £740m worth of capital in 2011, according to research by commercial property advisor CBRE, fuelled, in part, to the growth in rental prices and high occupancy levels in regional cities.
“Historically, the student accommodation market in the UK has always been a solid investment for institutions, with pension funds the driving force behind the majority of ventures. Over the past couple of years however, the market has shifted towards a more commercial offering and specialist companies like Knight Knox International have penetrated the market by re-packaging and selling individual units, which are more attractive to private investors. “
Attracted by this lucrative investment opportunity (average rental yields are 6-6.5%), both domestic and overseas buyers alike are focussing on building stylish, affordable accommodation for a more consumer-focused student.
Source: Knight Knox International