With a total of 2.2 million full-time students currently attending university across the UK, the demand for student accommodation has been rising steadily over the last five years. At the same time, the new supply of beds in purpose-built student accommodation (PBSA) has been dropping since 2019 when it reached over 30,000.
Experts now predict a shortfall of 450,000 beds by 2025 signifying a growing crisis in the PBSA sector. There is, however, a solution in the form of private investment in student property. With one of the world’s largest student markets, the UK has hundreds of universities that provide promising investment opportunities. But in terms of lucrative areas to invest in student accommodation Liverpool and Manchester have firmly established themselves as the leading locations.
With a student market worth £72 billion, the UK’s higher education sector is incredibly strong and has an expansive global reach. International students are now attending UK universities at record rates, which is increasing the demand for PBSA as well as rental value. In 2022 alone, growing demand and decreased supply caused a 5.1% rise in PBSA rents, along with a 10% increase in rents for private accommodations.
Of the long list of UK towns and cities that have multiple universities, there is a number that stand out from the crowd when it comes to investing in student property. In terms of a secure, cost-effective student investment opportunity, Liverpool is unarguably the UK’s most promising city.
Notably, property experts Rightmove have just released fresh data that shows a 0.9% average house price increase in January 2023 – the biggest increase at this time of the year in three years – meaning now could be the optimum time to invest!
When it comes to identifying an ideal student property investment opportunity, Liverpool is undoubtedly one of the best options for investors in the current market. With a student population of over 50,000 and counting, Liverpool has recently been voted the UK’s second-best student city, although some may argue that it tops the list. Let’s consider why, as a student investment opportunity, Liverpool is at the head of the pack.
Presently, the Liverpool property market is going from strength to strength with experts predicting continued growth in the next five years. Currently dominating TotallyMoney’s best buy to let areas with 6 postcodes in the top 25, Liverpool is widely regarded as the best city to invest in buy to let property in the UK.
With property prices currently around £82,000 lower than the UK average, Liverpool is also one of the most affordable cities to invest in, with many student properties purchasable for less than £100,000. Notably, a predicted price growth of 20.5% between now and 2027, presents a major capital growth opportunity for anyone who invests in the city this year.
In addition, Liverpool currently boasts some of the highest rental yields in the UK. Average annual rental yields of above 6% are common across the city’s key districts and have been known to reach 8-10% for properties located in the city centre.
One of the country’s most popular student destinations, Liverpool is home to some of the UK’s top universities, two of which were ranked comfortably within the top 50 in 2022.
These highly regarded academic institutions, known for their innovative and pioneering approaches to research in health, science and technology, attract thousands of new students to Liverpool every year, again highlighting the student property investment opportunity Liverpool presents investors with.
This £2 billion redevelopment project, home to the campuses of Liverpool’s main universities, will establish a collaborative environment of academic research that aims to bridge the economic gap between London and the South East.
This exciting district is already home to some of the world’s leading names in science, health and technology, and with £1 billion worth of new developments already underway, buy to let investment property in this neighbourhood will soon be in high demand.
In addition to the huge portion of students that choose to study in Liverpool from across the UK and Ireland, the city is also one of the most popular destinations for overseas students with over 8,000 international students currently attending the University of Liverpool alone.
Liverpool is also home to one of the largest Chinese student populations in the country which has prompted international investors to consider the kind of student investment opportunity Liverpool presents.
In most cases, International students, many of which have significant financial support behind them, opt to live in high-end purpose-built student accommodation. As Savills points out, Chinese students are around 2.2 times more likely to stay in this type of student accommodation as opposed to a shared private house.
This again points toward PBSA as a secure, easily tenanted property investment opportunity. Furthermore, with demand outweighing supply at a rate equivalent to three students per available bed in PBSA, the value of student property investment will continue to rise.
Learn more about investing in the Exchange Liverpool by requesting an info-pack for this development!
Of the purpose-built student accommodation for investment Liverpool has to offer, there is one that presents a unique and unmissable opportunity.
The Exchange Liverpool, ideally located in the city centre – a short walk from both John Moore’s Copperas Hill Campus and the University of Liverpool – offers a student living experience like no other development on the market.
Comprising a contemporary range of studio apartments and en suite clusters, prices in this fully completed and tenanted development range from £89,950, which is well below market value and the average UK property price. In addition, this modern development offers assured NET rental returns of an incredible 7%, meaning investors can start earning a sizeable passive income immediately.
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