With full time student numbers in the UK having grown from 984k in 1993 to 1.88m last year it’s no surprise that letting to students is a big part of the rental market, although it seems only 13% of landlords are currently active in this sector.
It might not be for everyone but yields average higher than with other tenant types and in some smaller university towns these approach 10% per annum. Yields might not be quite as high in larger cities with higher capital values but continued and growing demand underpins returns - in Bristol alone we are seeing first hand the impact of a shortage of Student rooms, and many of our clients are very actively expanding their portfolios to take advantage of this. This is further backed by Paragon Bank’s recent report (Student BTL Market Report). It states that "Savills revealed that there were 2.8 full-time students for every purpose-built student home in 2019/20, so even with the growing investment and factoring in of students who choose to remain in their family homes, there are enough students to sustain demand across all types of stock."
Paragon's report into the state of the market and how quickly it has recovered from Brexit and Coronavirus makes interesting reading, not least where it highlights what landlords think is important, and what students are really looking for. No 2 on their list after location was access to good Wi-Fi, with access to a gym at the bottom of the choices surveyed!
If you are interested in growing this part of your letting business or getting into it for the first time, do feel free to get in touch.