With increased demand for student accommodation – current students are being urged to reserve their accommodation for the next academic year or risk losing the best properties. Even worse; with demand running high and additional new students expected to study at many UK universities next year, they could be squeezed out altogether if they don’t act now.
“Don’t get left out in the cold or risk having to spend your next academic year living in poor conditions,” states Sevi Rixson of student property investment and development specialists Urban Student, which works in conjunction with a number of top property management companies. “It may appear a long way off but if undergraduate don’t act now they potentially risk their future.”
Last September a record 2.3m+ students descended on UK university towns, creating increased pressure for both places and indeed beds. In some towns students were reportedly having to share accommodation originally designed for single occupancy; while others were being put up in local B&B’s and hotels or had to trek in from up to 40 miles away. Next September the Government is removing student number controls altogether, which will place a further squeeze on student accommodation in many university towns.
“We already manage a number of student properties but with demand for quality accommodation is running high and we are always looking for new opportunities. We recently developed a number of individual houses in Durham which are already being rented out to students,” continued Sevi. “Several of these completed properties are also being offered to individuals looking for strong revenue yielding investments."
“Not everyone wants to invest time and effort into developing and managing a property as a landlord. Our Fully Completed Income Producing Investment (FCIPI) scheme means we take on all the renovation and management work and then offer the package to potential ‘armchair’ investors so they don’t have to be hands-on. This means they can benefit from a net return of over 7%pa from day one along with strong asset growth and should they ever wish to take it out of their investment portfolio they can resell the freehold property through the age old channels.”
With demand for accommodation running at an all time high, Urban Student recently converted two redundant floors of storage space above a retail outlet in the heart of Durham into nine studios with communal areas and independent access. The space was not needed for storage and had lain idle for quite some time. The project was done to a high standard in less than ten weeks and the units were all let off-plan in advance of the construction work even starting and well ahead of the new term starting.
This gave the investor certainty of income and the students got great, purpose designed and affordable, modern accommodation that is within easy walking distance of both the university and many local facilities. What’s more the shop is still open for business but what was previously a cost centre now has a market value close to £1m with circa £60,000 gross rental income per annum.
Elsewhere other vacant B1 office property has been successfully converted into C3 residential under the Government’s Permitted Development scheme, creating a number of stylish ‘pod’ style units that are popular with students. Any project implemented via this process which typically means detailed planning permission is not required must have tenants in place before the May 16 deadline so vendors and property owns need to seize the day to comply with current legislation.