Student property is in high demand for buy-to-let investors ahead of the stamp duty changes in April, according to a new report from The Mistoria Group.
The student property specialists has revealed investors have been surging to complete deals by the end of the month, in order to avoid the 3% surcharge.
Top marks for investment
Research from the report shows that sales of student property in the North West has risen by over 30% already in 2016, in comparison to 2015. Over half of buy-to-let landlords investing in student property are from the South. Interestingly, one third are overseas investors, with the remaining 20% located in the Midlands and in the North.
In recent times, student housing has undergone a period of change. Higher rents has brought greater expectations from student occupiers, with many looking for luxuries such as TV’s, Wi-Fi and built in amenities as part of their rent.
What’s more, the abolition of a cap on student numbers has also led many universities to be mindful of an increase in enrolment numbers. Advice for landlords would be to seek out more high-quality, affordable student accommodation.
Rush
Mish Liyanage, Managing Director of The Mistoria Group noted, ‘we have seen a rush of investors wanting to purchase student property over the last quarter and we anticipate that demand for student property will continue to grow significantly in 2016 and beyond.’[1]
‘Since the birth of the buy-to-let mortgage 18 years ago, student accommodation has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK,’ he continued.[1]
Surge in student property investment in 2016
Yields
Liyanage also said that, ‘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. Our research shows that the North West provides greater returns than any other city in the UK. This is fuelled by the massive regeneration taking place in Manchester, with the proposed High Speed 2 high-speed railway between London Euston and the North West to be completed in the next 15-20 years.[1]
Concluding, Liyanage observes, ‘A HMO property can provide an 8% minimum cash rental yield and a typical 13% total cash yield, including 5% capital appreciation. The average gross cash rental yields for the student property sector in the North West of England were 8.1% for 2015.’[1]
[1] http://www.propertyreporter.co.uk/landlords/stamp-duty-hike-spurs-student-property-surge.html