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How Thinking Like a Student Can Boost Your Property Investment Returns

Generating more than £4 billion worth of investment in 2017, the UK’s student accommodation market is no longer a niche investment product.

Thinking Like a Student For Property Investments UK

UPDATED 29/08/2018

 

With more than 2.32 million students studying in the UK in the 2016/17 academic year, and the government’s restrictions on university admissions numbers now lifted, there has never been a greater audience for Purpose Built Student Accommodation (PBSA).


The success of the sector has seen everyone from individual landlords to some of the world’s largest investment funds enter the student accommodation market. Offering buyers generous rental returns and a captive market of student tenants, it has become the fastest growing asset class in the UK.


However, with the success of the sector comes a wave of new student accommodation developments across the UK’s most popular university towns and cities.

 

With so many options now available to the market, each offering similar rental returns, how can investors know which developments are most likely to attract maximum occupancy and perform beyond a rental assurance period?


Using the Lennon House PBSA development in Bradford, we can show you exactly what students are looking for from their accommodation, and how knowing can help to improve your chances of enjoying success with your investment.

 

Student Property for Sale Bradford UK

Image: Lennon House exterior


Finding the best place to live

 

As with any property purchase, location is essential. Whether you are looking at a traditional buy-to-let property or a development within the student sector, if the location is incorrect, your returns will be affected.


For the majority of students, location is one of the deciding factors when choosing their accommodation. When looking at the accommodation that offers the best value in terms of locations, students will prioritise those that are close to their campus, the city/town centre, and transport links.


By being close to the university, students are able to enjoy quick access to lectures, whilst minimising the time it takes to travel to and from the campus.


The most popular PBSA developments are also located in close proximity to the centre of the city or town, allowing students to reach local shops, supermarkets, and retail outlets, as well as engaging in leisure and cultural pursuits.


Lastly, having easy access to local transport allows students to interact with their friends from around the town or city. National rail links are particularly attractive for students, as they provide a means of visiting family, or day trips to larger city centres like Manchester and Leeds.

 

Student Property Investments UK

Image: Lennon House studio apartments interior


Although the University of Bradford’s student village, the Green, is located on-campus, it is around 0.39 miles from the Kirkgate shopping complex on the edge of the town, and over half a mile (0.56) to the nearest train station (Forster Square).


The developers behind Lennon House factored in the importance of location when choosing to convert the existing building into a range of high-specification apartments. The accommodation is almost equidistant between the university’s campus and the shopping complex, located 0.29 miles and 0.26 miles respectively.


Additionally, its closer proximity to the Forster Square station, at 0.39 miles, makes it ideal for students looking to minimise the distance between their family and friends back home, and their place of study, whilst simultaneously providing faster access to direct trains to Leeds than university managed accommodation.

 

Bradford Student Property for Sale

Image: Student studio apartment bedroom at Lennon House

 

Finding more than just a place to sleep

 

Traditionally, the UK’s student housing has been portrayed in the media as being a series of run down terraced houses, poorly maintained and filled with tenants who treat the property just as badly.


This is no longer the case. The modern British student has a taste for something better.


In recent years, the student market has been revolutionised as students have started to move away from the often run-down and limited options available within houses of multiple occupancy (HMOs) and towards PBSA.


Simply having a bedroom in a house is no longer enough for many students. They are looking to have the opportunity to live like a young professional, instead opting for studio apartments with dedicated kitchen facilities, study areas and an en-suite shower room, in order to make their money go further.

 

Purpose Built Student Accommodation Investments UK

Image: Free cinema room available for students at Lennon House

 

Lennon House also goes further. The accommodation, fully tenanted for the 2017/18 academic year, offered its students high-specification studios with fully furnished bedrooms, complete with double beds, a desk, wardrobe, and bookshelf.


Each studio also contains a fitted kitchenette, providing a cooker, kettle, toaster, microwave and fridge/freezer, as well as essential high-speed broadband throughout. Factoring in the importance of security, access to the accommodation is controlled with secure key fobs, as well as remote CCTV monitoring, giving students peace of mind 24/7.


But the developers also recognised that socialising is another top priority for students, and as such furnished Lennon House with on-site facilities and communal areas.


Current and future tenants have access to the accommodation’s gym, where students can enjoy the benefits of exercising together without the prohibitive costs of a gym membership, as well as a dedicated study room where they can complete their university work in peace, without the restrictions of library opening times.


Students are also able to benefit from a cinema room, which provides a fully cinematic experience metres from their bedrooms.


By including this range of facilities in their accommodation, developers are able to attract a broader range of tenants, providing students with access to a number of expensive services that would otherwise be beyond their reach. For a slightly higher rent, students can instead enjoy this access as a part of their everyday accommodation.

 

UK Purpose Built Student Accommodation for Sale

Image: Exclusive on-site gym, available 24/7 for Lennon House tenants

 

Finding value for money


With students in the UK demonstrating their desire for a higher standard of accommodation, as well as their willingness to pay more to live in developments that provide this, the focus of tenants has moved from simply looking for the least expensive accommodation option.

 

They now look for the option that provides the best value for money.


The continued success of the PBSA sector has seen the student accommodation market further diversify, creating a varied market with properties available to suit every budget and taste. As a result, there can be a vast difference in the rental rates charged to student tenants.


Similar to The Green student village, Kexgill Tower is a PBSA development located next to the University of Bradford’s campus, developed by local student accommodation provider Kexgill Group.


Rental charges for 1-bedroom student studios start from £126.00 per week, with large studios renting for around £141.00 per week. Although it has proximity to the university’s campus, Kexgill Tower only has on-site laundry and recycling; it does not provide its tenants any communal facilities.

 

Student Accommodation Investments UK

Image: Lennon House fully fitted kitchenette


Conversely, Lennon House’s rental charges are lower, starting from £105 per week, providing students access to the university’s campus, Bradford town centre and its railway station, as well as dedicated study areas and communal facilities for its tenants.


The disparity in rental rates throughout university towns and cities throughout the UK means that students are now able to find better standards of accommodation, with rooms and studios available for rental rates that offer greater value than those that are currently available at operational developments.


By investigating the comparable rental rates at competing developments, you will not only discover whether the rents a development is advertising are achievable, you will also be able to gain an understanding of whether that development can attract student tenants when compared to other developments.

 

Student Property for Sale Bradford UKEach studio apartment is complete with an en-suite shower room

 

Finding the best living experience


A crucial aspect of any property purchase is being able to place your trust in those who are selling a development to you. For investors, this is particularly important as the developer and contractor will be the people helping you to achieve your rental return.


Whilst this knowledge may not seem to be at the top of a student’s checklist when selecting their accommodation, it is the combined efforts of these parties working together to create a desirable living space that ensures that the tenants are enjoying the best possible experience during their tenancy.


The award-winning developers behind Lennon House, Miller Knight Developments Ltd., are a local contractor based in Bradford, having created over 2,000 student units in prime locations at key university towns and cities nationwide since 2008.

 

Purpose Built Student Accommodation Investments UK

Image: Students can also benefit from on-site laundry facilities


Design and quality are integral to the success of their developments, as well as their dedication to providing a comprehensive service at every stage of the development’s lifespan, from project planning and finance, through site construction, to long-term property management.


Showing an acute awareness of shifting student priorities away from traditional HMOs to hotel-style accommodation, Miller Knight focuses on creating environments that promote student learning, building unique developments that provide comfortable and contemporary living spaces tailored for students to live and work in.

 

UK Purpose Built Student Accommodation for Sale

Image: Security to Lennon House is maintained with secure key fob access and 24/7 CCTV monitoring


Finding the best student property investment


By taking into account how a student selects their accommodation whilst at university, it is possible to gain a new perspective on a development, allowing you to better understand why a development may or may not succeed as your next student property investment.


Here at PrinvestUK, we have witnessed the journey that this market has taken from an alternative investment property type, to one of the UK’s leading property asset classes.

 

As the student population of the UK grows and this property sector continues to develop, we will continue to bring you the very best in UK student accommodation developments, such as Lennon House in Bradford.


For more information about the student property market, and to view our full range of student properties available for investment, please visit our Student Accommodation hub page.

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