student property investment

Student Reforms, A Good Result For Student Property Investment

UCAS published their final suite of figures for university places on the 29th August, 15 days after A level results day. It is interesting to look at these results and see what the effect of the changes introduced by George Osborne this year has had on the University population. These figures and the related data is worthy of review for those looking at student property investment.

The figures show that at the 29th August , all placed university applicants at 15 days after A level results day were 476,540 a rise of almost 17,000 and representing an increase of 4%. This followed the shock announcement in the 2013 autumn budget that the interim step of an additional 30,000 places could be available this year will the number of places totally uncapped from 2015

Mr Osbourne spelled out the motivation for this in his speech at the time. “Each year, around 60,000 young people who have worked hard at school, got the results, want to go on learning and want to take out a loan to pay for it, are prevented from doing so because of an arbitrary cap.” He also expressed his concerns that the UK had a far lower proportion off people attending university than other countries such as the United States.

The speed of the implementation of this change in policy meant many universities were caught on the hop, and were not prepared for such an announcement and have needed to adapt and implement changes within the universities to accommodate the extra student demand. Universities however, keen to benefit from this prospective increase in revenue, are investing to capitalise on this opportunity from 2015. Universities however, will face increased competition and will need to be proactive in their recruitment of additional students. If you are considering looking at student property investment, then some points  worth of note include previously oversubscribed universities, oversubscribed courses in addition to new investment in facilities and research grants rewards announced by various universities, which may prove successful in attracting additional students.

The increase experienced in 2014 has already highlighted locations where there is insufficient student housing and we have seen newspaper reports of parents begging letting agents for properties, a positive sign demonstrating  a clear demand for those looking at student property investment. In addition to the investor buying rooms in the purpose built student accommodation which are let directly to the student by operators such as CRM and DIGS, the more substantial investor can look at an alternative form of student property investment.

Some universities may look at quick solutions to enable them to meet their commitment to housing all first year students. One option is that they rent a whole development directly from the property investor and then the university is the student’s landlord. This has proved successful for many universities such as Brighton. For those looking at this type of student property investment the pros are that you are letting to one reputable tenant who will sign a contract with you which may be 3- 5 years. The university may manage the property itself taking away hassle and providing a hands off student property investment. The only downside is that the university in exchange for giving the security of the contact will look for a competitive rent which would be lower than individual tenants would pay, and you may also still need to manage the property or pay for management. Investment Property Consults are able to offer those contemplating student property investment a variety of different opportunities to suit the preference and budget of the property investor.

 

Categories: General , Students

For more information, please get in touch