Overseas students now make up over 50% of the UK’s post graduate market but a lack of bespoke accommodation means new high yield opportunities for investors in the same way the undergraduate accommodation has over the last 10 years, according to research from buy to let investment firm Assetz.
It suggests that there are post graduate hotspots in Glasgow, Leicester, Liverpool, Southampton and York
It says that investors looking to diversify or increase their buy to let portfolios are being attracted by net yields of up to 8% for post graduate accommodation in some of the strongest locations such as the De Montfort University in Leicester and Glasgow University.
The students are coming from China, India, Nigeria, Germany, Ireland and France and want decent accommodation, not wanting to make do with inferior accommodation.
‘Under graduate student hall of residence accommodation has long been a sound buy to let investment opportunity, offering excellent yields, but the lucrative market in high quality post graduate accommodation is only just starting to materialise,’ said Stuart Law, chief executive officer of Assetz.
‘Many students are continuing to study after their undergraduate degree due to the current competition in the UK jobs market and overseas students are drawn to the UK for its excellent standard of university education. Our experience is that post gradates have a clear preference for their own space,’ he explained.
According to the firm this if for self contained, hotel style studio apartments which facilitate independent living in a well managed building that permits peaceful study. He believes that net yields of up to 8% and low entry prices from £65,000 for a self contained studio apartment are a fantastic income producing investment for investors' long term income needs.
Assetz is offering units at two post graduate accommodations schemes at Primus Place in Leicester and Collegelands in Glasgow. Apartments at Primus Place start from £65,000 with an assured net rental yield of 8% for two years.
Leicester is home to 39,000 students, 25% of whom are post graduates. The site, on De Montfort campus, is within walking distance of the University of Leicester and De Montfort University and is in close proximity to transport links and the Highcross Shopping Centre. The apartments are described as high quality, self contained studios, with 24 hour reception desk and public open spaces.
Apartments at Collegelands start from £77,300 with average yields of 7.5%. Collegelands provides deluxe, self contained studio units which are larger than traditional bedrooms but also operate at 50% of normal energy costs, thus ensuring that the net yield is protected as energy prices rise as expected.
In Glasgow there are over 10,000 international students with more than half of overseas students enrolled in a post graduate course. The firm says that Collegelands is ideally located in the centre of Glasgow within 200 meters of the University of Strathclyde, 700 meters of Glasgow Caledonian University and 2.5 miles from he University of Glasgow, with easy access to transport links and shopping facilities.
