Does the north offer the best opportunities for student property?

Posted 1 March 2016 by Luke Fitzsimmons

Student accommodation is a growing sector in the buy-to-let property market, but where should investors target their attention for the best returns...

The student accommodation market has been hot across the UK now for the past few years, bringing in more new investors than any other arm of the property sector and taking itself from being a niche product, into the realm of some of the biggest assets around.

However, while property has earned its place among the top property performers, there is one area where it turns traditions on its head. The north-south divide is a common theme in terms of property in England, with prices perennially stronger in the south than in the north amid a backdrop of demand and a lack of supply.

In the world of student property, it appears to be the north that is the powerhouse, however, with new research from Experience Invest showing that demand from investors is stronger in the northern areas of England than anywhere else.

While the number of people who said they would consider investing in student property in the south was relatively low - 7.73% and 10.65% in the South West and South East respectively - the areas further north saw much higher intentions.

Some 16.67% of respondents in the North East said they would consider becoming a student landlord, while more than 15% of those in the West Midlands said the same.

Even in London, where investment in buy-to-let properties is always red hot, only around 10% of people indicated an interest in student property, suggesting that the north has far more power when it comes to the sector's hottest asset.

Those investors in the north are also more aware in general of the sort of money they can make from investing in student homes. According to the Experience Invest research, some 22.62% of North East-based respondents said they know they can get strong yields on student property, compared to just 15.6% who said the same in London.

So just what is behind this mirror-image north-south divide when it comes to student property? The answer is simple - the strength seen in the north in recent years has shown landlords that invest in property in the student sector is a sustainable long-term and profitable project.

Cities such as Manchester, Leeds and Newcastle have some of the highest student numbers of any European cities, and with UCAS reporting a growing number year-on-year UK-wide, the demand for properties becomes ever more acute in these areas.

Development of higher-quality purpose built accommodation in these areas also makes investment in the northern regions of England a very attractive prospect. Buyers can get themselves units in buildings specifically designed for students that allow them a passive investment strategy and a guaranteed return, making them ideal options for newcomers to the country's most trendy asset class. 

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