What does the future hold for student property investment?

London plays host to many of the world’s leading universities and research centres, some of which feature in the Russell Group’s list of ‘world-class’ institutions, including Imperial College London, King’s College London, and Queen Mary University of London. London is not struggling to attract students, whether those students come from other parts of the UK or abroad.

Investment in student property has, for many years, been considered relatively low risk. Property investors from all over the world have been investing in student accommodation in London, as the demand remains high, despite fears that Brexit might put the brakes on the flow of students from the EU.

So, what might the future hold for student property investment, and will it continue to be a good option for buy-to-let investors in central London in particular?

Demand from overseas students is strong

Though it is not clear to what extent Brexit will deter students from other EU countries choosing to study in London, the number of overseas students coming to the UK to study is likely to increase. The quality of some of London’s higher education institutions continues to draw students from across the globe, while the exchange rate is favourable for overseas students. Investors should not worry about future demand, as most demand comes from UK and overseas students, with students from the EU accounting for between 5-10% of all full-time students in the UK.

Where are the best buy-to-let returns?

Even though London, and other university towns and cities, will always offer buy-to-let opportunities to investors wanting to let to students, some locations within those towns and cities will be better places to invest in than others. Rental returns can be dictated by specific location, so it is worth talking to a central London letting agent who knows the local area and will be able to advise you on where to invest. Whether you want to invest in a modern, smartly-furnished flat or a larger HMO, there are many options for investors, and again, professional guidance from a local letting agent can prove invaluable.

What do students want?

The future for student property investment would appear relatively stable, and it remains one of the best-performing asset classes. But

investors should take care to avoid any common pitfalls and ask themselves an important question: what do the students of today (and the future) want? What do students look for in their accommodation, and what might they look for in the future? Is purpose-built student accommodation a good bet?

Student numbers have risen in recent years, rents, especially high-end lets or HMOs, can be profitable investments for landlords, while void periods can generally be kept to a minimum. However, with student tenants it can be easier to have a letting and managing agent to ensure a stress-free let.

If you’re keen to invest in student property in Marylebone, Baker Street or other parts of central London, get in touch for guidance about investing and letting.