It would be fair to say that the overall numbers in the United Kingdom student property market are on the up. The Coventry student accommodation market is no difference, overall throughout the UK there is an increasing level demand, which ties with the growing student population in the country. If you are an investor looking for an opportunity that is likely to provide short and long-term returns, this is a market to consider.
In 2017, investment in student properties and development in the UK stood at £5.6 billion. This was a marked increase in the £4.5 billion figure reached in 2015, and that year was notably higher than 2014’s number. This is a market that is on the rise, and with so much money invested in the market, there must be an opportunity to generate a return on investment.
PBSA has a key role to play
The demand for purpose-built student accommodation, PBSA, arrives when the relationship between student tenants and buy to let investor landlords is evolving. This is a competitive market, and landlords have to provide a better standard of service to be viable in the modern marketplace. There are also new regulations conditioning the rules of the property a landlord can offer.
These new regulations ensure old ideas regarding student accommodation are no longer relevant. Today’s student demands modern conveniences, stylish accommodation, a place to socialise and most importantly, a home away from home, allowing them to maximise their efforts.
Students and landlords benefit from high-end student accommodation
It is this changing culture that has shaped the current student property market, and it is easy to see why purpose-built student accommodation fits the bill for both landlords and tenants. The student tenants want convenience, in the property and concerning travel to campus and nightlife, security and social aspects, while landlords wish to value for money solutions that help them engage tenants.
Some of the most common features provided in purpose-built student accommodation blocks include:
· Reliable high-speed broadband
· Car parking
· An on-site gym
· On-site stores and coffee shop
If you are a landlord looking to reach out to the student market, the above areas should become integral components of your service, not additional standalone services.
There is no denying the increase of overseas students, including non-EU students, has driven some of the change in student accommodation. In the 2016/17 term, over 300,000 students from outside the European Union were studying in the United Kingdom. This represents a significant commitment, and these students (and their families) want comfort and convenience. A student who is planning to live in the same area or property for three to four years wants to find the ideal location that makes them feel at home, and purpose-built accommodation helps these students settle in.
There are two key factors to consider in appealing to students hailing from non-EU countries.
Many of these students are more affluent, or at least their families are, than their domestic counterparts. Therefore, these students are looking for higher-end solutions in the rental market. These are the tenant’s developers have in mind when building, and landlords wish to let to.
Overseas students want a settled lifestyle
Also, if these students are planning on staying for several years, it would be best for them to have a settled home at this time. Student halls or strict term-time accommodation requires a lot of packing up and then settling in each year. However, with the option to provide dependable student accommodation over a more extended period, these students are well-catered for.
The student property market has also been welcoming to overseas investors, not just students. In the period from 2016 to 2017, the market share for foreign investors in the UK student property market rose from 35% to 64%.
Another positive aspect of the student market is it provides landlords and investors with the confidence to move away from London. There is a fantastic range of Universities and Colleges across the country, all welcoming students from around the world. Naturally, cities like Manchester and Liverpool claim a lot of the focus when looking outside of the London student property market. However, when you consider landlords can obtain high-quality student accommodation with an outlay that is 70% less than what they would pay in the capital, it is easy to see why these areas are in demand from landlords.
Coventry has a lot to modern students
Important cities like Coventry have a lot to offer to investors keen to enter the student property market. Coventry University and the University of Warwick are notable institutions which require accommodation in the city. Both these Universities have experienced an increase in student population in recent years, and indications are this will continue.
Studies suggest that growth has come from an increase in domestic, EU and non-EU students. In 2017, the increase in non-EU students across these two leading institutions was 625, an increase of 4.7%.
In the period between 2012 and 2017, the number of EU students studying in the local area rose by more than 2,500 people, an increase of 84.3%. This is an area that may be affected going forward, but the reputation of these institutions, and Coventry as a place to live, is of a high standard.
Student homes have moved with the times
Student halls and Coventry student accommodation in general have improved almost beyond recognition in more recent times, realising the demand for better service provides them with an opportunity. These residencies are of a higher standard than they were before but still fall short of the more top end of the private market. Those investors looking to enter the higher end of the student rental market should take University residencies as their starting point, and aim to deliver a better standard of service on top of that.
If you are interested in letting to students and would like guidance from professionals who understand the market, please get in touch with Student Circle. We are pleased to say we have helped many landlords enter the market, and we are specialists in Coventry and surrounding areas. However, no matter the question you have about student letting, contact us, and we will be happy to help.