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Investment in UK student property boosted by Indian Government legislation

Investment in Student Property.

The recent legislation by the Indian government which raised the allowance for inInvestment in Student Property.vestment in real estate outside the country by up to the equivalent of 125000 US per person, per financial year, is boosting demand for student property in the UK, according to The Mistoria Group – leading student property investment specialists.

The yields in India for residential rental property has been historically low at around 1-2%, but appreciation is high, between 10-30 % per annum.  Over the last 3-4 years, property prices have corrected, but rentals have not improved.  Hence, Indian investors are more keen to look overseas.

Investing in UK student property offers investors a long-term investment option, as typical rents are significantly higher than a comparable buy-to-let property in the same city.

The average gross cash rental yields for the student property sector in the North West of England were 13% for the first three quarters of 2014, well ahead of the 6.37% forecast for average student property yields across the UK, for this year.

Mish Liyanage, Managing Director of The Mistoria Group explains: “We have experienced an increase in demand from Indian Investors over the last few months, all of whom are looking for investment in student property.

“Since 2011, investment in student property has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK.

“It has also continued to be one of the most resilient investment sectors, with rental incomes and property values remaining stable, or increasing.  The attraction of the Investment in student property sector has been driven by structural undersupply and positive rental growth year on, despite the economic downturn.

“Our research shows that students will pay more in the UK for high quality, well-maintained accommodation than for the traditional run down and neglected shared houses, because there really isn’t a big price difference between poor and high quality accommodation. A HMO (House in Multiple Occupation) property can provide an 8% minimum cash yield, though we provide a typical 13% cash yield, including 5% capital appreciation.

“What’s more, the domestic student population is continuing to expand, with an extra 30,000 university places offered in 2014.  UCAS have reported they are expecting an all-time high of 500,000 applications this year.

Sandeep Singh, an Indian lawyer and a real estate investor comments: “The UK is considered a safe market without a lot of hassles for overseas landlords looking for passive income.  The UK law does not prohibit international investment from foreign nationals. To add to this, there are no legal hassles regarding title of property and the prices of real estate in Indian cities are very much comparable with prices in UK major cities.

“Since the legislative changes, the UK student market has become highly attractive for Indian investors as it offers high yields, good asset growth and hands off investment.”

Mistoria Group was formed in 2009 by entrepreneur, Mish Liyanage. Together with a group of highly qualified, successful property professionals, he ensures that each client receives a bespoke solution tailored to their specific property needs. For further information, please visit www.mistoriagroup.com or call 0161 707 6106.

 

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The Deposit Protection Scheme – Keeping Your Money Safe

Deposits can be a scary thing.  You’re handing over a large sum of money to someone you barely know, and trusting that you’ll get it back.  Unfortunately, landlords have broken this trust in the past, which is why in 2007, the Government introduced tenancy protection laws in the UK.  These laws mean that landlords are obliged to place your deposit within a deposit protection scheme to keep it safe until you get it back.

The schemes are government run, meaning they’re completely reputable and trustworthy.  The four schemes available to landlords are:

Each of these websites contains a tool which, as a tenant, you can use to double check that your deposit is protected.  Your landlord is also legally obligated to tell you which deposit protection scheme they are using and how you can apply to get your deposit back.  For a full list of landlord responsibilities regarding your deposit, and to check your landlord isn’t keeping any important information from you, follow the link here.

So what if your landlord hasn’t used a deposit protection scheme?  Well, the four aforementioned websites all offer help and advice for such an event.  The official government website on deposit protection also recommends contacting a county court, who may demand that the landlord repay you the deposit or pay it into a scheme within two weeks.

Moving house is stressful enough without the added anxiety of what your new landlord may be doing with your deposit, so keep your mind at ease by making sure your money is stored away in a reputable deposit protection scheme.  It’s the law!

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Regulation of Letting Agents

Landlords and tenants are to be better protected by rogue letting agents under new government legislation.

A recent amendment to the Enterprise and Regulatory Reform Bill has introduced the regulation of letting agents. Until now letting agents have not been legally required to be a member of an ombudsman scheme, despite the huge sums of money the industry handles each year.

It’s thought prior to this new legislation up to 40 per cent of letting agents did not sign-up to self regulation.

This made the situation difficult when things went wrong.  Tenants and landlords now have the chance to get money they are owed back from rogue agents without resorting to the courts.

Mistoria Estate Agents welcomes tighter regulation, we believe until now many agents have been able to operate with impunity as consumers have had no way of addressing the actions of unscrupulous or negligent agents.

Lady Hayter, the Labour peer who has led the campaign for lettings regulation comments,

“While this is definitely a step in the right direction, I think it’s a shame that the government stopped short of introducing full regulation of the lettings industry.”

Ian Potter, managing director of the Association of Residential Lettings Agents says,

“The government’s amendment to the Enterprise and Regulatory Reform Bill marks a positive move for the private rented sector and in particular, for consumers, who only stand to benefit from a formal system of redress. However it is vital that the Government begins the process of consultation quickly, taking on board the views of the sector and moves to introduce secondary legislation as soon as possible.”

It’s hoped this new legislation will come into effect by the autumn, following a consultation with both industry and consumer groups.

If you have a property you would like us to manage for you, please get in touch. Call us on 0161 707 6106. We look forward to hearing from you.