Does student property remain the stable asset class investors are looking for?

Does student property remain the stable asset class investors are looking for?
 

Student property has seen more than £11 billion invested in the last few years as buyers start to see the real value of putting their money into something that has seemingly endless demand.


Uncertainty has been the order of the day in the property market for the past year. Brexit, a hung parliament and the voting in of a rather unexpected candidate across the Atlantic in the US has meant many people not being all that sure about their investment choices moving forward as the political market shows just how we can never quite be certain how things will play out. 

It’s meant a change in attitude in the property market, which has seen house sales numbers fall and asking prices dropping repeatedly. It’s been a better story in the rented market, but even that hasn’t been experiencing the highs it has in the past. For example, in the past 12 months, rental prices have risen by a little over 1.5 per cent. While this is still a rise, the uncertainty the market has experienced has definitely meant a drop-in confidence somewhat. 

However, there is one area of the market that is largely undeterred when it comes to uncertainty. Student property has the ability to command a rather more consistent level of demand, and as such investment rarely weans. Over the past few years, repeated years of £3 billion plus in investment has left the market one of the hottest asset classes around. And moving forward, it may just be the beacon of certainty that investors need. In fact, this year, Savills predicts growth of over 17 per cent in investment levels in student housing, with more than £5.3 billion set to be spent. 

Student demand

The biggest positive in terms of the student property market is how it continues to be able to provide investors with a level of demand, even at a time when uncertainty is rife. For example, the political uncertainty that came about this year may have seen UCAS data showing a five per cent drop in applicant numbers thanks to worries about the future of the EU, but there are still more than 560,000 people applying for courses in the UK this year, and that helps create a sustained demand, with the majority likely to need somewhere to rent in the private sector. 

This is especially true in cities like Liverpool, where the 57,000 plus students outnumber available rooms, meaning there’s a real demand for more investment moving forward.

Exciting off plan developments

One of the most exciting parts of being able to enter a student property investment in the UK is that you have the chance to buy off-plan. Not only does this mean you can invest for a little less than you may otherwise be able to, it also means you can invest in future proof properties that have students in mind. Purpose built accommodation such as Aura from Experience Invest in Liverpool allows you the chance to buy into something that is likely to perform well for years to come. This is because the design of such buildings plays into exactly what students want, keeping demand high as a result. 

Aura, for example, is a development which gives residents access to top of the range facilities including a communal lounge and shared kitchen facilities with smart LCD TVs, as well as high-speed internet and high spec design in every room. This meets the demands of how students want to live in the modern world, and gives developments like this the potential to perform well for years to come. 

Peace of mind

One bonus that investing off plan in student housing gives at a time of uncertainty is that it really does give you the chance to buy into something that has stability at the forefront of its operation. For example, in Experience Invest’s Aura student development, investors have a fixed term assured return of 8.5 per cent over the next five years. 

At a time when uncertainty is the order of the day, having that peace of mind that your returns are assured for any period of time is a fantastic asset to have. And when you’re buying into one of the UK’s fastest growing asset classes, you know that this is only likely to improve again in years to come when the sector as a whole weathers the political storm. 

 


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