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Many people will certainly think of London and Manchester when the words, ‘buy-to-let student accommodation’ are mentioned. Whilst these areas are prevalent in the student accommodation investment sector, they have become over-saturated with student developments. That means that students will have more options for purpose-built housing, creating a lot of competition for investors who want to earn a high yield. London is also known for having very high property prices with squeezed rental yields. The yields are very underwhelming with the London School of Economics and the University of London registering yields of only 3.25% on average.
Many other savvy property investors, and even investors who are just beginning to get their foot on the property ladder, have grasped that if they want an investment to remain prosperous for the long-term they need to tap into a location that has a high-demand and a significant under-supply.
For this reason, investors are looking at areas like Glasgow – Scotland’s largest city and the fourth largest UK city, for an alternative to the typical Manchester-London student property location.
Investments in Purpose-Built Student Accommodation have been the leading property investment sector in the UK for 5 years in a row. Savills reported that investment activity in the PBSA market performed exceptionally well in 2015, with a total of 74,500 beds traded at a grand total of £5.9 billion.
Another report by Savills stated that although less beds were traded in 2016, at total of £4.5 billion, there was an increased amount of investment activity from overseas investors in countries such as Singapore. The purchase of UK student property from Singapore investors grew massively and in 2016 alone, a total of around £1.2 billion was bought, further suggesting that UK PBSA is a highly lucrative sector that is attractive to foreign investors as well as those based in the UK. A commercial real estate company reported that about 30,000 PBSA bed spaces were made available in 2017, making the total number of PBSA bed spaces a record breaking 602,000.
The outlook for this sector in 2018 seems very promising and fruitful, despite some concerns regarding Brexit. A lot of investors are left wondering what will happen to student numbers when the UK fully withdraws from the EU. However, from what we can see there has been a rising number of EU students studying in the UK and university applications for the 2017 cycle boasted 51,185 EU applications which is the second highest on record. The highest number of applications were made in 2016, so the two years with the highest number of EU student applications are 2016 and 2017 which suggests that Brexit is not really a concern in this sector.
So now that you have some insight into how well this property investment sector performed in the recent years, you may be wondering why Glasgow is the new student accommodation hotspot for private investors?Request A Call Back From One of Our Student Property Investment Experts
Glasgow Student Accommodation Investment – A Prosperous Student City
In 2013, Zoopla announced that Glasgow was the best university town in the UK for buy-to-let landlords to rent to students. Now that PBSA is becoming more well-known and new PBSA developments are being built across the country, becoming a hands-on buy-to-let landlord is no longer the best option. Most PBSA investments are fully-managed which means that all the management and all associated costs are covered by the developer and a professional property management company, therefore if you are not a Glasgow resident or even if you live on the other side of the world, you can still profit from a student accommodation investment in Glasgow.
Private investors see the fully-managed aspect as a huge advantage because investors that have numerous properties in their portfolio save a lot of time and hassle having a property investment that essentially manages itself. It is a massive advantage for first-time investors as well because it means that no experience is required to become an investor in PBSA, opening up the opportunity for people with little experience and no time to become an expert.
Student Numbers In Glasgow’s Top 5 Universities
In Glasgow’s top 5 universities alone there is estimated to be over 109,000 students. The University of Glasgow accepted around 24,726 students last year and is the amongst the top most popular educational establishments in the entire UK. Other universities in Glasgow also include Glasgow Caledonian University with 15,339 students, University of Strathclyde with 25,586 students, University of the West of Scotland with 11,600 students, and City of Glasgow College with 32,000 students.
What does this mean for student accommodation investments in Glasgow? Well, it means that the demand is definitely there. These excellent yearly student numbers coupled with the under-supply of student housing in Glasgow means that there is a massive opportunity for investors who move quickly.Request A Call Back From One of Our Student Property Investment Experts
Why You Should Buy Student Property In Glasgow
We gave you a breakdown of the student numbers in Glasgow’s top 5 universities, but it gets better! Overall, there is estimated to be around 133,000 total students attending universities and colleges in the Glasgow area and only 20% have access to a PBSA. This means that there is a potential 80% of students who are forced to resort to HMO accommodation, which is more often than not less desirable and of poor quality compared to PBSA. Glasgow’s modern and cosmopolitan student population is looking for housing that is luxury and high specification, which is exactly what PBSA offers.
We have a student property in Paisley, Glasgow that boasts assured NET returns for 5 years, along with a very attractive assured buy-back option at 20% above purchase price. This PBSA development will be attached to Paisley College, housing many of their overseas students who are looking for a place to stay whilst they study and are more likely to pay a little extra for their accommodation. The assured buy-back from the developer gives you peace of mind knowing that there is a planned exit strategy when it comes to selling the student property and there is a definite 20% profit. Accompanied with the 8% NET yield, this investment is sure to give you a high return. View this Glasgow student property investment here.
At Sterling Woodrow, we pride ourselves on helping new property investors get a solid start in the market and are happy to speak to you about your long-term goals and ambitions in property investment.
We also work with experienced investors to help them increase the value and profitability of their portfolios.
To book your complimentary property investment consultation with one of our senior portfolio managers simply click the button below and complete the short form and we will call you back at the appropriate time.Request A Call Back From One of Our Student Property Investment Experts