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PRESS ARTICLE: What do students want from private rental accommodation?

property_reporter_logoA new report has unveiled what students most desire from their private rental accommodation.

According to The Mistoria Group, leading investment specialists in student property, top of the ‘want’ list is a quality white goods (83%), superfast broadband (75%), security (55%), approval to keep a pet (25%) and a large plasma TV (16%).  Hitting rock bottom are luxuries like a hot tub (1%) and garden terrace (1%). The most common downfall of student digs was cited as poor quality build of the property and furniture, followed by poor internet connection.

The research also shows that the majority of students (91%) would most like to live in shared accommodation and just 9% opted for a private, self-contained flat.  When asked what household bills concern them most, gas and electric came top (94%), followed by food (83%), telephone and broadband (50%) and contents insurance (16%).

Mish Liyanage,  Managing Director of The Mistoria Group explains, this sends a clear message to landlords and investors:

“We know that the most important considerations for students when choosing rental accommodation is price, space and location.  This research gives us an insight into what students most desire from their property and it show us that the vast majority of want to live in high quality, shared accommodation, with good internet access and affordable bills.

If landlords and investors provide the right type of property, they will be able to attract lucrative students.  Recent research* shows that 69% of landlords and letting agents prefer to let to students and 84% agree that students make good tenants.  The popularity of students is  down to better rental yields (76.5%), an annual market for new students (53.7%), rent is guaranteed by a parent/guardian (45.6%) and rent is paid promptly (25%).

Student accommodation can offer a number of attractive features to investors: yields are high as students settle for less space than other tenants; occupancy is typically high; and it is neatly counter-cyclical, as more people go to university during economic downturns.

A Mistoria HMO offers between 8%-10% cash return on the rental income% PA return of investment from day one (this is not a projection).  PBSA yields are traditionally guaranteed by the developer for the first 5 years (although the actual annual return from day one is less) to ensure that by year six, the investment will potentially produce 9%.  This is subject to current market trends of an annual rent increase of 3% remaining.

Student housing is increasingly a global asset class. Over the last two years, there has been a huge surge in student housing investment activity Investment in student accommodation is certainly big business in the UK right now. There was £5 billion worth of standing stock and development sites sold in 2012 and 2013, and the early signs for 2014 suggest that we are likely to see high levels of investment activity this year. In the first four months of the year, there have been transactions worth £950 million and this equates to over 17,000 beds.”

Investors who are thinking of buying student property should conduct thorough research before making a purchase.

Mistoria has put together some tips on investing in student property:

•HMO versus student pods: Think carefully about the property you want to buy eg HMO or a student pod.  Most student pods are sold ‘off plan’ – which means before they are complete and in many cases before construction has even started – and come fully managed. This means you could expose yourself to risk on two fronts –  ‘development risk’ and ‘management risk’. For example, the development may not be finished, or the developer may not have the skill or experience to manage the development and if they do, how much will they charge for their services?

•Mortgages: If you need to secure a mortgage to purchase a student property, this will be a lot easier for a HMO, as you will be able to go through traditional buy-to-let providers and will have access to the leading buy-to-let rates. Also, if you are building a portfolio, you can lend on your equity in the HMO to fund further investments. With student pods, there is no established resale market, so it is much more difficult to secure a mortgage.

•Rent guarantees: Beware of ‘rental guarantees’ offered by developers. This can often be an overstatement.  The guaranteed rents are attractive to investors, but often they fail to materialise. Investors are actually subsidising the guaranteed rent by paying an inflated price for the unit they secure. There have been a number of student pod schemes that have stopped paying out the guaranteed rents soon after completion and investors have then discovered that the real market rate for the rents is much lower, reducing their yield.  They have been left with an underperforming asset, that is difficult if not impossible to sell at an acceptable asking price to the investor.

•The exit strategy: With a normal buy-to-let, you can sell the property at any time on the open market, through a reputable estate agent and expect a reasonable capital appreciation. However, selling a student pod will encounter problems.  For example, who decides the market value? As a piece of real estate per sqm it is very expensive (double the average market value), there is no established resale market. Who will sell it? Is it an investment, or is it a piece of real estate?

This article first appeared in Property Reporter on 16th September 2014

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PRESS ARTICLE: Not grim up north: it’s where best student property rental yields are for UK landlords

wise-moves-logoEngland’s northern regions offer the best returns for buy-to-let landlords, with central London the least profitable place in the UK to rent out a property, claims new research.

The Buy to Let brand of Lloyds Banking Group, BM Solutions, has brought out a quarterly index suggesting investors looking for optimum rental yields should consider the north (both the north west and the north east) and the West Midlands, where typical yields are around 6.4%.

Next most profitable UK property hotspots for buy-to-let landlords are Wales, the East Midlands, Scotland the South West.

Calculations were made based on rent received against typical values of flats and houses to generate a yield figure for 12 regions across the UK. (These gross yields do not take into account mortgages and other expenses, and is based on surveys of genuine landlord portfolios.)

Inner London offered the lowest yield at 5.5%. This is down to price rises in and around the city, which have outstripped rent rises, and so led to lower returns.

The Mistoria Group, which specialises in student property investments, says some of the interest in northern areas is down to the BBC move to Salford. There, and in Liverpool, house prices have soared more quickly than anywhere else in the UK since the beginning of the year.

Managing Director at the organisation, Mish Liyanage, says: “The North West in particular presents a range of properties at affordable prices that offer net returns of up to 10%.

“For example, a furnished, fully refurbished HMO student property near a uni campus can cost less than £150,000 and give a net annual return of 9%. Investors wanting the top yields should forget London and the south east and head north.”

It’s about buying the right property through the right agent – and about your money working for you rather than the other way round.

The BM Solutions survey is backed up by findings from property group Knight Frank, which came to similar conclusions.

This article first appeared on wise-moves.co.uk on 12th September 2014

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PRESS ARTICLE: UK landlords will find best rental yields in northern regions, it is claimed

 

The North of England offers the best buy to let returns for landlords in the UK with central London at the bottom, according to new research.
Investors looking for top buy to let yields are better off buying property in the North West, North East and the West Midlands where average rental yields are 6.4%, says the quarterly index from BM Solutions.

Landlords can also expect 6% in Wales, followed by 6.3% in the East Midlands, 6.2% in Scotland and 6% in the South West. The index also shows that average yields are 5.9% in the South East and outer London. In the East of England and Yorkshire and Humber it is 5.7% and central London is bottom at 5.5%.

According to The Mistoria Group, leading investment specialists in student property, the BBC’s move to Salford has created a lot of interest in northern areas of the country. Property values in Salford and Liverpool have risen faster than in any other town in Britain since the start of 2014.

‘The North West offers buy to let landlords a multitude of affordable properties that will give net returns of up to 10%. For example, an investor can buy a HMO student let property close to a university that has been fully refurbished and furnished, and that is already tenanted for the coming year, for less than £150,000. This will give investors annual net returns of 9%,’ said Mish Liyanage, managing director of The Mistoria Group.

‘By choosing the right property and the right agent, investors can sit back and after years of working for their money, can finally see their money working for them. So if investors want top yields, they should avoid London and head north,’ Liyanage added.

Retiree, Joy Townley from Calne, Wiltshire, recently bought two investment properties in Salford through The Mistoria Group. ‘I decided that property was the right choice for me because of the current low interest rates and I wanted a better return on my capital,’ she said.

‘I live in the South West of England where property is extremely expensive. Buying investment property in this part of the country was out of the question and the North West is a growing market. The numbers just added up and I am enjoying s consistent income stream. I’ll be keeping hold of the properties for the long term,’ she explained.

This article first appeared on Overseas Real Estate on 5th September 2014

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Last minute student accommodation

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With 145,730 students eligible for clearing last year many young people are predicted to be in the same position this year. A reduced amount of time to organise accommodation often leads to students panicking over where they are going to live during term time.

Due to such high entry numbers some universities do not account for clearing students when allocating student accommodation. Students have to widen their search and look at different living options, and so private accommodation is becoming increasingly popular amongst young people.

Offering a shared living environment just like university halls, private accommodation offers high quality living space with an often lower price tag. At Mistoria Estate Agents we specialise in private student accommodation and often provide clearing students with last minute solutions.

A common worry of clearing students is that they don’t want to be ‘left out’ of the university action by living in private accommodation. All of our properties are located in close proximity to universities and our houses are made up of students creating a similar environment to university halls.

Most of our properties offer benefits such as all inclusive rent, double beds and large communal living spaces for housemates, allowing for a close knit group of friends to relax together.

With rooms still available for 2014/2015 booking Mistoria Estate Agents have properties in prime locations around the major universities in the North of England. If you are a student looking for last minute accommodation but do not want to scrimp on quality Mistoria will have something to meet your needs.

Just use the search tool on our website to find the perfect student accommodation for 2014/2015.