Student accommodation in London and other parts of the U.K. are considered to be the best investment asset class, that’s why LHA London emphasises that it’s important to be familiar with investment strategies.
When planning to buy this kind of investment properties, look out for their rental guarantee. A student apartment with at least two years of rental assurances indicates strong rental yields — anything shorter than that means the developer isn’t confident of the property’s rental prospects.
In addition, the U.K. student accommodation sector lures investments over 10 times more than in Germany, although the latter country’s market is better known for stable investment growth.
Still, 2015 proved to be a bright year for both countries, as investments in U.K. student accommodations rose to €5.8 billion and €525 million in Germany in the previous year.
With all the investment numbers, it’s easy to determine why many buyers are interested in snapping up student apartments. However, be aware of pricing works for these properties.
The cheap ones are usually attractive, but the low price tag could mean minimal rental demand. That’s because most of these properties have fewer specifications and rarely have access to good facilities, including supermarkets and public transportation.
Identifying your target market is another thing. Ask yourself if you’re looking to capture a slice of foreign students flocking to the U.K. at an increasing rate, or if you’re more interested in the domestic market.
Factors Affecting Demand
Local and international students want to study in the U.K. simply because of the country’s education system. There are 44 academic institutions in the country that are listed in Times Top 400 university rankings and with 436,000 international students alone, it’s not hard to see why the student accommodation sector remains in demand.
And since the student accommodation in London is a huge market, a lease or rental option is a good alternative if you’re still unsure of buying a property at the moment.