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.
