Where is the Prime University location for investors?
This article will focus on the types of university accommodations you can invest in, featuring a few of most valuable university locations.
The United Kingdom is home to a wide range of Universities, with 4 out of the 10 best universities in the whole world coming from the United Kingdom (according to Top Universities.com). It makes perfect sense to invest and consider locations that would generate a lot of revenue.
Every summer there are new and returning students going to University; with A-level results day from Thursday 15thAugust 2019. There will be an increase in housing applications from students who got their first/second choices. Students may also consider using UCAS Clearing, in an attempt to get a place elsewhere. This is where property investors come into play, with many University locations across the United Kingdom having lucrative investment potential.
Options for Investors
The lack of residential housing for students in general has created a new venture known as ‘Purpose Build Student Housing’. These are constructed to withhold a large group of students and contain facilities that are excusive to students living within that location. These facilities hold the likes of studio rooms, entertainment spaces, common rooms, gyms and laundry facilities.
The primary purpose for these types of housing is to allow free space for ‘local councils’ (University business). Every year the number of students is considerably increasing, which impacts the amount of residential housing available, as there is a ‘under supply in the housing market’ (Property Investors UK). Universities generate PBSH properties to create interest from students, which in return acts as ‘free marketing for your buy to let’ (https://universitybusiness.co.uk/Blog/ultimate-guide-to-investing-in-student-property-2019/)
Houses in a multiple occupation (HMO) are properties that are ‘rented out to three or more people who do not form a single household’ and that share facilities such as a ‘kitchen or bathroom’ as stated by Taylorwessing.com. There are usually older Terrace houses, given to those who cannot stay in halls after the first year of University. These lack the essentials of a student accommodation, yet for those without the ability to live in student halls, the HMO becomes the most viable option.
When considering which University to invest in, it is important to take into consideration two contributing factors. One factor to consider is the overall university rankings within the country. Another contributing factor to consider is the rankings for specific subjects for example Medicine, Dentistry, Business and other specialist subjects. These subject based rankings may vary and is important to take into consideration.
Taking into account the second contributing factor, Keele University is one of the top Medical schools in the country according to ‘The Complete University Guide’. When taking this into account it means that one student would be at University for at least five years (Six years if the individual considers doing an intercalated medical degree).
Considering the location of Keele is not within a city, it creates difficulty for students to have the option of having access to many HMO properties. However, with the creation of PBSH properties such as the ‘Keele House’, it would offer a perfect opportunity for investment. Quote from Propertyinvestments.co.uk also agrees with this notion that it is the perfect opportunity for investment with regards to ‘yields’ and ‘location’, taking into account it is in ‘student format’ as stated by ‘PropertyInvestmentsuk’.
Bristol City holds the top 10 rankings for many courses such as civil engineering, electrical engineering, forensic science to name a few. The Sunday Times claims that Bristol was the best place to live in 2017, described as a city that is a ‘handily placed for seaside and scenery, but hardly cut off from the rest of the county.’
This shows that it is a lucrative potential for investment around Bristol University as students would welcome the lifestyle the city holds. Considering the fact that Bristol is vastly different from Keele in terms of being a city location, it offers variations of both PBSH and HMO properties for investors to consider, giving a wider variety for investment.
In respect to the longevity of students living in your property, One Touch Investment stated that Bristol has ‘lower unemployment rate than any other UK City’, which in turn becomes appealing to those who ‘wish to remain in the city’ even after graduation. This would reduce the likelihood of having different tenants through the yearly cycle of new students.
We hope this article has provided insight into investing into student properties and potential universities to consider.