It seems that everybody and their pet ferret wants to get in on the action, and it’s not difficult to see why. Occupancy rates for Leeds student accommodation run at an average 99%, which basically means that if you buy student accommodation, you are guaranteed to find tenants. What is more, because there is constant demand for student accommodation, they can put their prices up above inflation safe in the knowledge that people are going to pay up. Thus that rate of rent has risen up to 5% annually. The rate of return for investors high. For a modest investment of £50,000 an investor can generate a net yield of 9%. This has led to more and more average Joe’s taking a shot at property investment in an attempt to become fat cats, hence the astronomic rise in investment in student accommodation across the UK.
Future figures are expected to be more conservative as only the top universities, like the University of Leeds, are going to draw the students; and where students go, investors follow.
The UK economic activity may have shrunk by 0.2%, much to the dismay of David Cameron, Nick Clegg, George Osborne, and just about everyone else, but today’s investors refuse to acknowledge the dark storm cloud; they’re busy chasing the pot of gold at the end of the rainbow.
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