Student accommodation 'is big area for landlords'

by Sarah Ashcroft

An increasing number of landlords who are paying off buy-to-let mortgage loans are branching out into student accommodation, as the sector is considered a sure-fire way to enjoy healthy returns.

This is according to Nick Marr, director of the Little House Company, who said this sector is currently a "big area" for commercial property landlords, with it being thought of as a more secure area for investment.

Mr Marr noted the fact that because there will always be students, there is likely to be a need for high quality accommodation for youngsters who are looking for that home away from home.

His comments echo the sentiment of Peter Mindenhall - researcher at strategy developer - who said proprietors should always invest in properties located in established areas or near well-known universities in order to gain interest in their property portfolio.

The industry expert said it is vital to carry out research into certain parts of the country in order to identify the areas that are lacking in suitable properties for students.

Commenting on wider buy-to-let trends, Mr Marr said that he believes individuals who invest in property for seven years are unlikely to lose - particularly in sought after areas such as central London.

He noted that rental demand in the capital has increased significantly in recent years, as the current economic climate has resulted in many people opting to rent due to being unable to afford a mortgage.

Mr Marr said the attitude of investors is also different at present, as individuals are still adverse to off-plan projects.

"For example where a new building is going to be built, and it is just at the planning stages – that used to be a really big area [for landlords to invest in].

"The global financial crisis has impacted that kind of investing and people are a bit scared of investing at that early stage."

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Published on: September 6, 2012

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