Student property investment in the UK rockets

Steve Lumley·30 June 2021·4 min read
Student property investment in the UK rockets

Investment in the UK’s student property sector is rocketing, according to one leading firm.

The Mistoria Group says that the number of enquiries from property investors interested in student accommodation has risen by 23% in the last six months.

The enquiries are coming from both international and UK-based investors.

The news follows recent research from real estate firm Jones Lang Lasalle who have highlighted that one in three student property deals so far this year have been financed by private equity firms.

Between 2016 and 2019, private equity firms financed 15% of student property deals.

The Mistoria Group's managing director, Mish Liyanage, said: "The student rental market is financially lucrative for investors if managed well.

"However, if landlords do not keep their finger on the pulse, they can fall easily into the trap of not planning properly or use an inexperienced agent which could lead to costly void periods."

Student accommodation has outperformed other property assets

He added that student accommodation has outperformed other traditional property assets since 2011 - and is the strongest growing property investment sector in the UK.

Mr Liyanage says the attraction for investors in student accommodation is being led by positive year-on-year rental growth and the structural undersupply of student properties.

Indeed, student application numbers this year are projected to rise by 8.5% and purpose-built student accommodation (PBSA) is oversubscribed in some areas.

Mr Liyanage said: "Investing in a student accommodation HMO offers a long-term investment and the property will be in constant demand through the year. Rents are significantly higher typically for student properties than a buy to let home in the same city."

The managing director of Accommodation for Students, Simon Thompson, said: "News that demand from private equity and private investors in student accommodation is increasing underlines the strong potential for the sector.

"As with all property investment opportunities, potential landlords and investors need to consider if the property will meet their needs and be prepared for the work that is needed for student property investment success."

Student letting agent slammed for Covid-19 isolation bill

Meanwhile, one student says that when she and her housemates were forced to isolate for three days in their student accommodation, they were handed a bill for £300 by their letting agent.

The student told the Daily Mirror that their isolation period ran for three days over the tenancy agreement's end date while living in a six-bedroom student home in Headingley, Leeds.

The 20-year-old says that she told the agents of their situation after a housemate had tested positive for Covid-19 which meant the entire household had to isolate for 10 days.

The unnamed student told the newspaper: "Being students, £300 is not something we can afford, especially as some of us will have new tenancies that are starting in other properties.

"Charging a house of students £300 for following government guidelines to isolate is immoral and unprofessional."

The letting agent concerned, Beyond Lettings, said they had tried to manage similar situations amicably between incoming and outgoing tenants and the landlord concerned.

They added that they were not profiting from the situation and are following advice and guidance from the government and supporting their student tenants in challenging times.