Student property investors urged to look at modern buildings

by Daniel Jones

Landlords focused on the student rentals market should be looking at modern properties to deliver the best returns, it has been claimed. Before they even search for undergraduates to sign a house share agreement, landlords should first consider how their property will appeal to prospective tenants.

Peter Mindenhall, researcher at, thinks the traditional converted semi-detached property is "falling by the wayside" because of new rental regulations, while on-campus developments are "in need of upgrading".

"New-build developments with planning approval and support from the university and local council are the primary things to consider," he argues. "Some developers will also include management services or companies which will appeal to more active investors."

Kevin Wilkins, group marketing director at Bovis Homes, also believes now is the right time to get into new-build properties. "This is a good time to buy and it's a particularly good time to buy new," he says.

This comes after Knight Knox revealed that instead of a decline in student numbers as many had predicted, demand for university accommodation is soaring.

It notes that while tuition fees have risen, the UK remains a competitive study destination internationally. The company also suggests that the market is becoming more commercial, as investors seek to make the most of rental yields of 6-6.5 per cent.

Research from Knight Frank suggests that strong demand and undersupply means student accommodation should remain one of the best buy-to-let investments this year.

Figures from the firm show rental returns have almost doubled year-on-year in London from 8.4 per cent in September 2010 to 15.1 per cent the same month last year.

Looking after older properties remains essential for landlords who do not have spare money to invest in new-builds. "Returns will be dictated by the management of the properties," Mr Midenhall says.

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Published on: February 21, 2012

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