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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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PRESS ARTICLE – Why discerning student-property investors choose Mistoria

www.retiremove.co.uk is the property and lifestyle website for the discerning retiree.

Read the latest feature about the Mistoria Group, in which, Joy Towney explains her reasons for choosing property as a form of investment and how the Mistoria Group helped her manage the process…

Retire Move

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Student Accommodation Investment

If you have been following the UK property investment market over the past 12 month then you will know that there has been a huge growth in student accommodation investment opportunities.

Here are 5 salient reasons why a growing number of people are opting to make a student accommodation investment.

Links and support from Universities

As well as having a limited amount of accommodation, many university halls of residence are out-of-date and need modernisation. Due to budget constraints the universities are more than happy to work with private accommodation providers, as long as the accommodation is good enough quality and meets their desired criteria and standards.

Top Asset Class

UK Student accommodation has performed very well as an asset over the past few years delivering consistent high yields.  

The CBRE reported that last year student housing strongly outperformed other property asset classes delivering total returns of 9.6pc for investors, compared with 4.4pc for all office properties and 2.2pc for all retail.

Savills 2012 spotlight on student housing also stated that,

“UK student accommodation performed well over the last 5 years, showing average annual total returns outperforming many commercial property asset classes.”

Student Accommodation Investments Are Relatively low risk

With great demand and high occupancy rates investing in right type of quality student housing, in a good location should be the strategy to follow. Jo Winchester, head of student advisory at CBRE explains,

“As an investment, student accommodation is relatively low risk and provides a secure income. Occupancy levels remain high, especially when compared to the vacancy rates in some mainstream sectors, and most university towns remain under-supplied.”

High yields

When managed by a professional management company fantastic occupancy levels of almost 100% can be achieved.

Knight Frank declared student property the best performing property investment in 2012, with rental income rising by 5 per cent per annum and returns averaging 11.5 per cent.

Strong exit strategy

Student accommodation investment properties are an asset that are growing in popularity with rising demand from property investors.

When good and consistent rents are achieved they becomes more valuable, and easy to to sell. When re-selling they can be of particular interest to other investors.

If you own a property that you would like www.mistoriaestateagents.co.uk to manage please get in touch. Or if you are interested in investment properties visit www.mistoriagroup.com.