Share this
Digg
Del.icio.us
StumbleUpon
Netscape
Yahoo
Technorati
Googlize this
Facebook
Export PDF
Print
E-mail
LIKE MANY OF her peers, Rachel, 18, is excited yet nervous as she embarks on the adventure of a lifetime this week; starting university.
As she leaves home and moves into student accommodation in her university town two hours away, she will experience her first taste of adult life, and will have to deal with responsibilities such as paying the rent on time.
Rachel will, however, have to pay higher rent for her accommodation this year. The current average student rent in the UK has gone up 3% over the last year to £67.11 ($133.64) a week, research conducted by search engine accommodationforstudents. com shows. Those studying in London will pay even more as the average weekly rent has risen 5% to £108.03.
While this is painful for students — and their parents footing the bill — particularly in the current economic climate, higher rents has meant better yields for property investors. Property consultancy CB Richard Ellis has found that student-accommodation investments are generating attractive yields of between 5.25% and 7%, depending on location and leasing agreement.
The investment potential of the UK student- housing sector is undeniable. University intake in the UK is at an all-time high, as the economic downturn and high unemployment levels have seen more young people attending university. Universities and Colleges Admissions Service (UCAS) figures show that as at Sept 19, a total of 485,738 applicants had accepted a place at a UK university, compared with the previous year’s 475,520.
A significant 20% increase in student numbers over the past 10 years has resulted in a huge shortage of housing supply by institutions of higher education, says Savills. In its Spotlight on Student Housing report, the property consultancy is confident that the sector will continue to deliver strong returns compared with other mainstream asset classes.
London, in particular, with 40 higher-education institutions and an estimated 291,815 full-time students for the 2011 academic year, has been identified by estate agents and property consultants as the top location for student- housing investment. A significant shortage of supply — only 15.4% of students live in university-owned accommodation, according to estate agent Knight Frank — means there is huge demand for private student accommodation.
