If you are an investor, then it is possible that you have been approached regarding opportunities in student accommodation.
It makes sense – many students choose to attend a university away from their home town, and so need somewhere to live.
While those in their first year will typically choose to stay in housing provided by the university, second and third years will look to the private sector.
So, what makes this such a good opportunity for investors?
The number of new students in the UK is rising
Aside from a small blip a couple of years ago (likely due to the increase in tuition fees), the number of students signing up to attend university in the UK has been steadily rising – as the table below demonstrates.*
Please note that these figures only relate to undergraduate students studying for their first degree
In towns and cities that are home to a university, there are likely always going to be students. So the demand is going to be relatively high, depending on the popularity of certain institutions.
Of course, you will need to pay attention to what the market looks like in these areas. If there is already an abundance of student housing, then the addition of more could see a reduction in rental prices.
Rent Guarantee Insurance
If you have been approached regarding an investment opportunity in any sort of rental property, then it is worth asking whether it includes Rent Guarantee Insurance.
This type of insurance is designed to protect landlords against an empty property. If student accommodation goes un-rented, then the landlord – i.e. you, the investor – doesn’t lose any money.
The insurance will only apply for an agreed upon period of time (for example, ten years), so it is best to find out all the details, if any exist, before making a commitment.
If Rent Guarantee Insurance is included, then this is an additional reason to invest in student accommodation. If you are guaranteed rental income for a period of ten years, then it could be seen as a viable option.
Student accommodation is better than ever before
- Student housing has not always been an attractive prospect for investors, and as such, it has not always been of the highest standard.
- The typical tenant expects only the basics – a bed, a desk and somewhere to store their clothes.
- But with private investment, that has all changed. Now, certain flats and houses include state-of-the-art kitchen facilities, a large, flat-screen TV, free Wi-Fi.
- With all of these luxuries, students are more inclined to rent from private landlords, as opposed to housing offered by the university.
- They’re willing to pay more for it, too.
All of these are reasons as to why student accommodation is an attractive investment opportunity, and will likely continue to be.
For as long as there are students in the UK, there will be people who need this specific type of housing.