Buy to let student accommodation, also known as Purpose Built Student Accommodation (PBSA), is thriving. Popularity, demand and appetite amongst investors has increased significantly in recent years, making student property investment one of the leading asset classes in the UK. This is in no small part due to the fact that the UK student population is increasing year on year, with demand for university places higher than ever.
Student accommodation provides investors with the opportunity to diversify their property portfolios. They are usually available to cash buyers only and are always hands-free, fully managed investments, which allow the investor to sit back and watch their investment pay dividends.
There are certainly plenty of potential tenants. For example, in 2015/16 there were 2,280,830 students in higher education in the UK.
Some parents may think twice about forking out rent for three or four years when they could invest in a property for their children – and if they can afford to buy a house that will accommodate four or five students, there is the potential to receive a good rental income.
For those who don’t have children or those of student age, there is still an argument for investing in student houses or purpose-built student accommodation (PBSA). Developers in this specialist sector are keen to entice landlords with guaranteed initial rental yields and the promise that a management team will handle all the day-to-day issues.