Six key reasons why student property investment is here to stay

Student property has grown to become a popular property investment choice among institutional and individual investors. It has also risen to become one of the strongest-performing investments on UK soil. A number of compelling market indicators seem to suggest that student property is set to keep up its impressive recent record, including:

Demand Growth

Part of the reason student property is doing well is the fact that demand is high at the moment. Rather than tailing off, it looks set to keep growing over the next few years. More students, domestic and overseas, are entering UK universities each September and caps on intake numbers are being lifted.

Stock Market Performance

Student property is not only performing well as an asset in itself, but also in its presence on the stock market. Unite Group, one of the UK's most prominent names in purpose-built student property and a FTSE 250 company, recently achieved an increase in EPRA earnings of 45%.

Affordable yet Profitable

Student accommodation offers excellent value to investors compared to other property types. Purpose-built student properties have lower capital values and also tend to be smaller units than most other property investments. This makes them very affordable and accessible, yet the yields on offer easily rival other investment types.

Institutional Quality, Individual Prices

This same combination of market-leading yields and affordable purchase prices puts student property investment in a class all of its own. It is, in many ways, an investment that offers the kind of quality and potential you would normally associate with institutional investments – and indeed it is popular with institutional investors. Nonetheless, it is also accessible to the individual and this puts it in an attractive niche in which it has very little if any real competition.

Diversification Value

The value of student property to investors goes beyond the simple matter of earning returns on investment. It also has plenty of potential to play a vital role in an investment portfolio by adding much-needed diversity. Student property is its own market, often defying the trends seen elsewhere in the property market. This provides the investor with the chance to acquire an asset that could not only be possible, but also have the potential to help their portfolio stay buoyant when other investments start to be squeezed.

Record Amounts of Investment

One of the most compelling indicators of the strength of student property right now and in the immediate future is the sheer amount of investment flowing into it. 2015 has seen more investment than ever before flow into UK student properties, and this has come from both institutional and private investors based within the country and across the world. This shows the strength of the market at present, the amount of money propping it up (estimates of the exact figure vary but it is definitely in the billions), and a wide-ranging vote of confidence in the future of the market.

For more information about student property investments, please contact Hopwood House.