A report that looks at student property investments has found that the increase in the number of students in the UK has resulted in an increased demand for accommodation in the North West that consists of quality and high standards. This has increased by 48% year on year with the demand from investors also increasing by 55%.
The number of international students has increased as they are now attending universities located in the North West in places such as Liverpool and Manchester and this has resulted in high demand for student accommodation. Property in the North West is priced relatively low and the returns are excellent and this is seeing more investors choosing to invest in the North West instead of London.
Out of 86 university towns and cities throughout the UK, The University of Salford, the University of Manchester and Manchester Metropolitan all ranked in the top 10 for rental yields. While the rental yields in much of the city can reach 4.4% in Salford and Liverpool it can reach as much as 8%. Both areas have undergone regeneration projects in recent years while infrastructure, transport and business areas are next on the list and this means that the growth will continue to remain strong.
Many landlords are seeing full occupancy for their HMO properties. Salford has seen 100% occupancy while Liverpool has 98% and enquiries are still high with waiting lists being long, as students expect accommodation of a high spec.
There has also been a large influx of interest from investors looking for HMO properties in those areas in the North West that have universities. The mixture of solid yields and full occupancy is the main factor behind the interest from investors. Following the decision to leave the EU, international investors have also shown a keen interest as the figure has risen by 35%. Many of the investors come from India or China, as they look to make the most of the weak pound.
Student property is continuing to prove that it is by far the best performing asset when compared to other areas within the property sector. Student numbers are continuing to rise and post graduates are seeking accommodation that is well located and this means that the demand is going to continue to increase. The yields seen in the North West cannot be seen anywhere else and this makes it a great investment.
As an example of just how lucrative these investments can be, a four bedroomed HMO located in Liverpool can be purchased for £150,000 with cash yields reaching 13%, rental yields % and capital appreciation reaching 5%. If investors want to take advantage of this and target the student market in Liverpool, then purchasing a property with multiple bedrooms located within a short walk of the University will work best. These properties have to be desirable and finished to a high standard. Transport links and a close proximity to amenities will also help to enhance the desirability of the property.