ARE HMOs / STUDENT ACCOMODATIONS THE ONLY WAY?

[Interest rates can only go 1 way & that is up, so cashflow is key!
Yields tend to be very low in many places around the country and particularly London, so naturally, more and more landlords are considering switching from the single dwelling to multi. Renting to students is a great niche. Please read the interesting article below published on 7-Dec-11 on the following site: http://www.investortoday.co.uk and let me have your comments about the subject.]

It can be said that 2011 has been the year of increased awareness of student accommodation investments by private landlords and buy-to-let investors. The asset class is no longer limited to property funds. Everyday people have confidently entered the market by purchasing student investment pods in university halls across the United Kingdom. The question is which is the best city to invest in student accommodation?

The Knight Frank 2011 student accommodation report points to the top 20 university cities for investment. The knowledgeable staff and research team have spend considerable time in accessing the student market and have based their final selection on ‘a number of key variables – rents, investment yields and capital values – and is based on the achievable return of both en-suite bedrooms and studio apartments. Data was been collated from over 20,000 purpose-built student bedrooms located across key university towns and cities in the UK.’

The research tracked the key criterion over fives years and found that London is Ranked number 1 for Student Accommodation investment. In terms of future market requirements, there is a structural undersupply of ‘value’ accommodation in London, good-value en-suites aimed at the £150-£200 per week price bracket. In the Knight Frank Global Wealth Survey; ‘which examined the views of 350 wealth professionals, London was ranked the highest amongst all global cities for its educational offer and this factor was deemed a key purchaser motive amongst the world’s super-rich.’

Student Accommodation in London presented the highest investment potential because of demand, supply and local economic fundamentals. The higher rents and investor yields can be achieved in London due to the fact that 25% of the full time students are post-graduates and 35% are International students that will rent the accommodation for the full 51 week period.

‘There have been a number of student pod investments for sale to private investors across the UK’, says investment analyst Graham Flaherty of One Touch Property. Greenwich Student Accommodation Investment is the first of its kind in London. Its proximity of only 100 metres away from a Greenwich university campus and net yields of 9% will make it an attractive proposition for investors’. The first 20 student pods were purchased within one week is a clear demonstration that there is a hunger for London Student property investments.

Last year Knightsbridge Student Housing was established with backing from Oaktree Capital Management Ltd with the aim of acquiring £1 billion worth of assets in the UK student housing market. The large investment funds continue to show significant interest in the UK student market and are confident of the future investment returns demonstrated by the considerable investments being made by them.