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Why Student Property Investments will Survive the General Election
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The general election typically causes unrest for property investors who have assets in the UK.
Data from previous election years indicates that many wait until the outcome is announced before buying into the property market. In 2010, there was a 23% rise in house sales in the three months after the result compared to the three previous months.1
It has been claimed that any doubts surrounding investments at this time are unnecessary. However, if you are looking to be completely confident in your investment, student property is the one asset that guarantees security.
Why is student property so safe?
Why Student Property Investments will Survive the General Election
Student accommodation is completely separate from residential and commercial property, meaning that it is not always affected by the economy or housing market. During the economic crisis, student property was the only asset to record growth for every year of the recession.
Market performance
Student property is the UK’s best performing asset class, with £3.3 billion being invested into this sector in the first quarter (Q1) of 2015 alone.1
Furthermore, demand for purpose built student accommodation (PBSA) has never been higher. Despite tuition fees increasing to £9,000 per year in 2012, university enrolment is at record levels, with 659,030 applications at the beginning of this academic year. Over 5m overseas students also study in the UK.1
International students are known to prefer high-quality PBSA, however, there is a huge undersupply of this type of housing. Most students have to live in the private rental sector, which is not always suitable for them.
Average rents have risen by 3% annually, as students will pay more for PBSA if it is available.1
Universities will be able to remove the limit to enrolment numbers from September 2015, meaning that demand for this type of property will only increase.
Political policies
When tuition fees increased after the 2010 general election, it was expected that application figures would decline. However, they are at record highs.
This year, three of the main political parties have pledged changes to tuition fees:
- Labour want to reduce fees to £6,000 per year.
- The Green Party would get rid of fees completely.
- UKIP would scrap fees for those studying science, technology, engineering, mathematics and medicine.
Although students could see more changes to their tuition fees, the demand for student accommodation looks set to remain high.
1 http://www.selectproperty.com/2015/04/why-student-property-wont-be-hit-by-the-general-election/
