Purpose-built student accommodation (PBSA) forms the backbone of the UK’s buy to let property market. A surge in student numbers both domestically and overseas, changing demands in accommodation and rapid changes to the numbers of people living in busy centres have contrived to make PBSA a vibrant and profitable market.
Investors making their first forays in the PBSA market will be heartened to discover that with the right application and diligent prior research, there is plenty of money to be made.
The modern student demands a lot more in their accommodation these days. The days of peeling paints, damp carpets and central heating that has seen better days are long gone. Instead, demand for high-end, luxury accommodation has become the norm for those looking to leave home for the first time and commence their studies.
Leading property firms such as RW Invest offer premium quality student accommodation that is perfect for savvy and discerning investors. Offering a lot of more than all mod cons, the standard for PBSA involves high-speed broadband, on-site gyms, car parking, round-the-clock security and en suite living spaces. PBSA investors must understand that not only is this the new normal, but demand in high-density student areas has reached a peak, with the promise of further growth to come.
Investors must not only consider what’s on offer in their PBSA of choice, but that is has a favourable and appealing location to tenants too.
Most students who take up privately rented accommodation prize city centre living and deem it of the utmost importance when it comes to their decision making.
Students much prefer to live near their university campus, preferring a short commute on foot or by bike, instead of the extra expense and hassle caused by cars or public transport over longer distances. City centre living also means better access to bars, restaurants and other places of leisure.
Investors would also do well to note the trend in the growth of overseas students heading to the UK.
Brexit has done little to dampen the worldwide enthusiasm shared by many to undertake their higher education studies in the UK.
Overseas students can be a boon to PBSA buy to let investors, as they prove to be a better long-term tenant and thus can give landlords a more consistent and reliable income stream. Where a UK student may be more partial to leaving their accommodation to return home between term times, an overseas student will be less inclined to do so. With a huge spike in the number of students heading to the UK from China and the Middle East, the further the distance from home, the less likely they are to leave until their entire study course is complete.
Landlords can then look forward to three years or more of uninterrupted income from properties occupied by overseas students. Catering to this market will not only bring in better returns but will also save the landlords the bother of having to find new tenants every term or academic year.