Student housing leads the way as a top investment

Student housing is one of the top performing investment classes around the world. Property investors in the UK have considered the sector a haven for their cash for several years – and even corporate investors have sunk a record £2 billion in to halls of residence this year to date. Now, investors in the US, Canada, Australia and Europe are starting to join in. International property consultant Jones Lang La Salle says student investment have given yields of 12% in the UK, but US funds are doing even better with returns closer to 40%. In comparison, other property investments have struggled to return 1.2%, equities are hovering around 8% and gilts at an average 4.9%. The big switch from residential property investment to student property came after prices peaked in 2007. As buy to let and commercial property investment prices were on the slide, student investments have just kept getting better – mainly because the yields. The world economy has suited the change as well. In times of financial hardship, universities tend to fill as students look for better skills and qualifications to help them in a difficult jobs market. Also, as emerging economies seek more skills and families become richer, more international students can afford to take places in foreign universities. The top student destinations are the UK, US, Canada and Australia. Philip Hillman, director of student housing and higher education at JLL, said: "Not so long ago, investors looked at student housing as an alternative property type. It is hard to justify that now, as it is becoming a must-have investment for most large funds." Student housing funds are best performers in Britain and the US. Unite, the UK's largest student housing provider is the top non-listed UK property fund this year. In the US, American Campus Communities and Education Realty Trust are the two top performing REITs.

Landlord blog

Sam Dickinson

Further reading

University flats rented out to non-students making £100 million

Student visa applications plummeted by 14% in 2024

Unite Students sees robust rent growth and high occupancy levels