With a constant demand for student housing in some of the UK’s most exciting cities, student housing and the buy-to-let market offers landlords an exciting investment prospect for 2024. In fact, according to Savills, student accommodation has consistently outperformed other sectors in the UK property market, delivering net yields ranging from 4.5% to 6.5%.
Below we break down why property owners in the UK should explore the student accommodation market.
Student housing attracts a consistent stream of tenants
As the demand for higher education continues to increase the demand for student housing is growing alongside a shortage in rental properties available. With Savills estimating that the number of higher education applicants could reach one million by the year 2030, student housing offers a resilient market for property investment.
Landlords enjoy consistent rental income
With university students typically signing fixed-term contracts for an entire academic year if not longer, landlords can enjoy a consistent stream of income, often backed by parental guarantors. This paired with a shortage of student housing in certain areas ensures landlords won’t struggle to find long term, reliable tenants and a steady stream of rental income.
Student property provides higher rental yields
According to a study by Savills, purpose-built student accommodation has consistently outperformed other sectors in the UK property market, delivering net yields ranging from 4.5% to 6.5%. The demand for quality student accommodation in prime locations near universities allows landlords to charge higher rental rates if they wish, maximising the potential rental yield.
Student property landlords can enjoy certain tax benefits
Landlords of student property in the UK can be eligible for tax deductions on expenses like property management fees, maintenance costs and mortgage interest.
There are plenty of potential student locations to choose from, including:
Manchester
Voted the best UK city to live in according to the Global Liveability Survey, Manchester’s student population is one of the largest in all of Europe. With over 100,000 students (many of them international) in the Manchester region, a report from Zoopla in 2020 found that demand for property in Manchester outweighs supply by 5:1.
Boasting three top-quality universities, a thriving cultural scene and cost-friendly living for students, the city offers investment opportunities and property below the £100k mark, while also enjoying net rental yields commonly found upwards of 7%.
Liverpool
Ranked as the second best student city in the UK and home to an impressive five universities, Liverpool is one of the best places to buy student property in 2024. Alongside its vast 70,000 plus student population, the city is a popular student investment destination because house prices are commonly below the national average. With prices commonly available below £100k and returns north of 8% net plus additional growth potential predicted to be 11.7% by 2027 according to Savills, Liverpool offers investors a great opportunity.
Cardiff
Voted the best university city in Wales, Cardiff has a population of around 20% students alongside four top universities, making the city a prime spot for student landlords. Cardiff itself is a city that is also experiencing a high level of regeneration with trendy new bars and restaurants popping up across the city, and development projects like Cardiff Bay attracting new business and investors to the city.
Edinburgh
Boasting the University of Edinburgh, one of the most prestigious universities in the UK, Edinburgh attracts many students for the higher education opportunities and world-famous cultural scene. There are currently six universities in the city, which also boasts a vast amount of things to do, including music venues, art galleries, museums and green spaces.
While Edinburgh might have slightly higher property prices, with current averages of just under £310k, projections indicate the city will offer great returns, and with predictions of a 9.5% property price rise by 2027, now might be the perfect time to move ahead with investment and buying plans.
Contact a professional
Overall, buying and managing student property is a smart way to diversify an investment and property portfolio and can offer steady returns. That said, thorough research and market experience are essential to help identify prime locations, understand local market dynamics and assess potential risks. Tailor my Property offers a network of property, market and financial professionals who can assist with specific property and investment goals in the student sector.
Get in touch today to find out how you can capitalise on UK student property potential in 2024.