Two major events were expected to impact property:
- Brexit. When it happens and if it happens, it will lead to uncertainty in many areas of business
- The government’s housing reforms were heralded as a time when many landlords were going to sell up and seek other business ventures
Some property owners left while others invested in their current stock or consolidated. One area not experiencing uncertainty though is the student let business.
In Fact, it’s Still Booming
It’s been suspected for some time that the market is still buoyant. Property owners in the sector know that yields are better than in the general population, mostly because of the unique nature of the student market. But now, real estate firms have put hard figures on the facts. In 2019, it is estimated that around 29,000 new student accommodation spaces will be made available, bringing the grand total up to 600,000. Most of the new investment has come from firms in North America and the Far East, with a particular focus on the US, Hong Kong, and Singapore.
The new builds are expected to have a net positive effect on the general population too by relieving pressure on properties on how to use them. What’s more, it’s been predicted that student rents will increase around 2% this year in contrast to the general population which is stagnating or seeing reduction.
Properties with 3 Bedrooms Come Out on Top
In another survey, it has been revealed that properties with the best yields are those with three or more bedrooms. The nature of accommodation has changed. People are getting married and settling down later in life. Friends live together at first before pairing off and moving out with a permanent partner. And, of course, properties with 3 bedrooms form the backbone of the present student market. This type of property provides an astounding yield of around 11% on average for property owners. In comparison, renting out houses to families is just 6.4%.
Why is Student Accommodation So Popular?
Unlike other areas which are already being negatively affected by ongoing Brexit negotiations, there will always be a need for student accommodation. The supply of students is not going to dry up and universities will be able to appeal to some of the brightest and the best from all over the world. The ongoing confidence in the student let market is due to the steady income stream and the continued supply of both domestic and international students. Losing European students is likely to impact the education system, but this is one area that’s not expected to have long-term consequences.
Pads for Students offers a range of student accommodation options from HMOs to custom built student communities.