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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 rise of the International student

According to a report by Knight Frank in 2012, “student property has performed exceptionally well as an asset class compared to traditional investments over the last year.”  With global student mobility increasing and interest in the UK’s educational quality rising, further growth in the student rental sector seems inevitable.  Figures show that – despite tuition fees – by 2025, the number of students attending university outside of their own country will have doubled, with overseas students currently accounting for a sixth of the UK’s student population.

In general, international students are most likely to select purpose-built accommodation in the UK, for a number of reasons, such as security, location and facilities, and specialist providers of accommodation are in a good position to assist in supporting the requirements of this sector. At Mistoria Estate Agents, we pride ourselves on providing high quality student accommodation across the North West and our tenant testimonials demonstrate our passion to deliver and become the agent of choice for students seeking an exceptional standard of accommodation. 

Damitha Navarathna is one such student whom Mistoria Estate Agents has helped in securing good quality, safe accommodation in the UK for the duration of his studies.  Originating from Sri Lanka, Damitha is studying a BEng (Hons) in Aeronautical Engineering:

“The universities in the United Kingdom have always shown exceptional performance in the field of education.  From hundreds of universities, the university of Salford stood out as one with a brilliant and leading aeronautical programme.  So, before moving, I had to find accommodation.  One of my friends recommended Mistoria Estate Agents to me.

Based on the information on the Mistoria Estate Agents website (www.mistoriaestateagents.co.uk) and the trust I had in my friend, I decided to move into one of their properties.  The property I moved into was one of the best designed houses I have seen in the UK and it was completely refurbished.  The build quality was excellent.  Even the neighbourhood was student friendly and it is only a 20 minute walk to the university.  

With the installed alarm system, my house mates and I find this place extremely safe and comfortable to live in.  Out of the people I have met so far in the UK, the team at Mistoria Estate Agents were one of the friendliest and most helpful I can ever imagine.  If a problem arises, be it technical, economical or even social, the solution is one phone call away!  

I will recommend Mistoria Estate Agents to any friend of mine, either from Sri Lanka or any other country, without the slightest hesitation.”

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International Students set to fill UK’s Student Housing

Student HousingAny uncertainty over whether landlords of student housing would struggle to let their properties after a sharp increase in the price of Uni tuition is over, following a rise in university applications, driven by foreign students.

The number of foreign students coming to the UK is fast increasing, and over the next 10 years it is predicated to rise further. University recruiters are working hard to attract an international mix who are not put off by our high tuition costs. After all international students studying in British universities have been paying fees since the 1980s.

Many student housing landlords did have major concerns after the number of University applications seriously fell when the Government increased tuition fees to more than £9000 a year. The owners of student housing felt uncertain about whether they would continue to fill their properties year on year. However, University applications have started to rise, with a large proportion of those being from overseas students wishing to live and study here in the UK. Almost 559,000 students made applications to British universities by the official mid-January deadline, up by 3.5 per cent on the same point last year. Statistics show that numbers were being partly driven by a sharp rise in demand from foreign students, with applications soaring by almost 10 per cent.

China and Hong Kong continues to send the largest numbers of students to British universities and numbers were up by a quarter among those from Malaysia this year.

Owning and renting out your property to students both British and international is a salient way to earn steady inflation-matching investment returns. If you have a property you would like Mistoria Estate Agents to manage, we offer a tailored property management solution guaranteed to satisfy all your property requirements. We help you realise your property investment returns from day one.