As a large commercial coat is wrapped around the higher education sector in the UK, with university tuition fees and admission criteria sitting top of the agenda for these independent and business-minded institutions, the issue of student accommodation has been pushed under the spotlight like never before.
With many universities looking to grow their student numbers, as this in turn means higher revenue and potential to invest in larger buildings and more effective teaching, the need for quality accommodation has increased at a similar pace.
For universities that do not have any accommodation at all for existing students and potential ones, the demand for housing is even greater, and this is a trend that has led to student accommodation investment being cited as able to provide a high return on investment primarily owing to current levels of demand.
And it should be noted that there has been a shift in student culture of late, and fast-moving, profitable universities are moving away from the traditional ‘student digs’ approach to housing, and instead have a keen focus on providing access to the kind of properties that will encourage effective learning and development during the university years.
Investment rental property experts are also keen to ride this wave, with popular UK university locations like Liverpool already providing solid platforms for student investment rental properties.
And, as universities are finding out, the quickest way to ensuring that the condition of accommodation within the walls of the university city are of a good standard is to build ties with private companies that can invest time and effort into providing accommodation that generates profit.
For the investor, the environment for this type of property investment is made even more appealing when the detail is investigated, because while we all know that risk tends to be the shadow chasing property investments in recent times, student accommodation manages to move past this particular barrier. Private companies providing student accommodation will require whole year payments in advance, as opposed to the traditional monthly payment terms, so in many cases between 43 and 51 weeks worth of payments are made in advance.
Risk, when it comes to students, is also associated with rebellion and traditional views of student house parties and widespread destruction. But, investors into student accommodation also earn the right to have a code of conduct with the university, college or higher education institution, which empowers the owner to remove troublemakers at the first sign of risk.
Student accommodation investment has shaken off the shackles of long-held and traditional views, and instead embraced a new era for these business-like education centres. As the risk often associated with type of investment continues to wane, interest will move in the opposite way and student-dominated areas of the UK, like Liverpool, will be ideal platforms for high return property investments.