As students no longer wish to live in low quality digs, student rents are set to rise reports Residential Landlord.
Student rents are set to rise 3 per cent in London and 2.75 per cent in other regions in the year to September 2013, according to the latest student index from Knight Frank. This makes the average total return for institutional student property 9.2 per cent in 2013. According to leading property investment company Axis Investment, student property can give investors an extremely good return in the long term, providing they invest wisely.
The rapidly rising student property sector is worth approximately £20 billion, performing well over the last five years, with average annual total returns outperforming many commercial property asset classes. The regions edged ahead of London in 2013, offering substantial returns of 9.7 per cent, with investors in the capital receiving returns of 8.7 per cent.
Director of Aix Property Investment, Rod Thomas, comments: ‘Student property remains the best UK property investment sector when compared with other residential and commercial property’.
This is supported by CBRE, who reported last year that student housing strongly outperformed all other property asset classes. Office properties and retail delivered a meagre 4.5 per cent and 2.2 per cent respectively in returns compared with the total returns of 9.6 per cent for investors from
student accommodation.
Thomas continues: ‘“Student property investment has grown in the past few years because of a number of factors including an undersupply of quality stock; low void periods; and stable yields.
Today, students want increased levels of comfort and better facilities than was the norm years ago. By and large, they do not want to live in low quality digs and are prepared to pay more in order to spend arguably the happiest years if their lives in an environment conducive to their studies and lifestyle.’ Thus it is likely that the student housing market will continue to grow, potentially providing excellent returns for successful investors.
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News feed taken from: http://www.residentiallandlord.co.uk/news/3244-student-investment-growsas-rents-rise.html
