Rise in uni applicants is boost for buy to let landlords

Property investors who specialise in student accommodation are preparing for a bumper year, as poor unemployment prospects drive a surge in university applicants keen to avoid entering the current job market.

University applications increased 8 percent in 2008 according to UCAS, resulting in an additional 42,000 students applying for full time university courses, which is set to increase again in 2009.

This surge in demand is generating opportunities for professional property investors and buy to let residential landlords who purchase apartments in private university halls of residence, or invest in traditional shared student houses.

According to Assetz plc, the property investment and development company, investors can enjoy high net yields in the region of 5-6 percent (8-10 percent+ gross), as a result of strong demand and firming rents.

Stuart Law, chief executive of Assetz, said: “Investment in university accommodation is already paying massive dividends. It is an area in which I have invested personally over the years and it is the best performing part of my portfolio for income.

“Student property offers investors a high income investment, partly due to huge tenant demand and partly now as a result of the relatively low mortgage rates available. With traditional buy to let landlords currently seeing stable, rather than growing, rents and rising unemployment underway, this is one sector of the property market which is set to benefit from the economic downturn and is a great diversifier.”