The latest research conducted by The Mistoria Group has shown that there has been a surge in student investment from international buyers.
In particular, there has been an influx of international investors purchasing student accommodation in the North West of England.
International Increases
Data from the investigation has found that sales of student property to international purchasers is up by a whopping 185% year-on-year.
The largest rise has come from investors in Hong Kong, where yearly numbers have trebled. India recorded rises of 220%, the Middle East 130% and Singapore 90%.
In addition, the research shows that international markets are opening in Canada and Australia, where demand is spiralling.
London has traditionally attracted overseas interest in student markets, with Kuwaiti, Qatari, Saudi and Iranian investors extremely prominent. The Mistoria Group suggests that student property is becoming more and more attractive to overseas investors due to the high yields and occupancy rates offered in the capital.
‘Exponential growth’
Mish Liyanage, Managing Director of The Mistoria Group, noted, ‘we have seen exponential growth in demand from international investors wanting to purchase student property. Although many investors are attracted by the high performing yields of houses of multiple occupation (HMOs), the UK’s outstanding educational system is a key part of the attraction. Many international investors want their children to have a school or university education in UK and they will buy a student property as a base for their children.’[1]
‘International investors have always considered the UK property market to be one of their favourite asset types. It offers investors safe and secure returns and we are expecting to see continued growth from international buyers,’ he continued.[1]
Surge in international interest in student accommodation
Estimates
Mr Liyanage went on to say, ‘The Bank of England has estimated that the number of UK homes sold to international buyers is about 3% across the whole market. We estimate that this is going to continue to rise over the next 5-10 years as the UK property market out performs many other markets for yields and capital growth.’[1]
‘Over the last 5 years, student properties in the North West have generated yields in excess of 13% and geared yield in excess of 35% in Salford and Liverpool. An HMO property can provide an 8% minimum cash rental yield and a typical 13% total cash yield, including 5% capital appreciation.’[1]
Concluding, Liyanage claimed, ‘our research shows that the North West provides greater returns than any other region in the UK. This is fuelled by the massive regeneration taking place in Manchester, with the proposed High Speed 2 (HS2) high-speed railway between London Euston and the North West to be completed in the next 15-20 years.’[1]
[1] http://www.propertyreporter.co.uk/landlords/student-property-sees-surge-in-international-investors.html