It’s back to school for investors. Why student accommodation is top of the class!

At present, there is an estimated 2.4 million higher education students in the UK and this is expected to increase further in the next academic year. Applications for entry in 2011/12 are 2.1% higher than the same time last year according to the latest figures from UCAS (April 2011) with the increase in applications thought to have been triggered by students rushing to get a place at university before the proposed rise in tuition fees is introduced in Autumn 2012.

With already large numbers of higher education students in the UK combined with the increase in applications, the limited student accommodation stock available in and around university towns is under pressure. This however presents a lucrative opportunity for savvy buy to let investors.

As Alan Forsyth, Director of highly respected property investment agency, Property Secrets comments,

“From greater demand for accommodation pushing up prices comes greater potential to make large rental returns from investing in high quality student accommodation located in cities where respected universities are based. According to research by Knight Frank, rentals in the student housing arena remain healthy with a recorded growth of 5% per annum over the last six years compared with only 0.6% for commercial property.”

Astonishingly, university maintained properties have only met 23% of student demand for beds with the accommodation currently offered by many universities often outdated and inadequate. Independent research conducted by Knight Frank has also highlighted that only 50% of all students in the UK have access to high quality purpose-built student accommodation.

Interestingly the latest figures from UCAS report an increase in the numbers applying for university later in life. A 6.2% rise in 19 year old applicants has been seen for the 2011/12 academic year as well as a 4.8% rise in 20 year olds, 4.5% for 21 year olds and 4% for 24 years old, the majority of whom in this age group expect a higher standard of living. With this in mind, the focus is now on building new high quality student housing developments as private operators join forces with universities to take advantage of the rising demand.

Alan Forsyth continues,

“Student accommodation is said to be the single largest untapped real estate market in Western Europe and with conditions as it is, now is the perfect time to invest. The city of Manchester has been dubbed a top spot for investment in this sector, ranked number 7 in the Knight Frank Student Report 2011 for best cities with the strongest investment potential in the UK.”

In Manchester, according to CB Richard Ellis, multinational commercial real estate advisor, students are underprovided for and forecasts that the development arena is “ready to go again” presenting a genuine opportunity for developers. While roughly 79,000 students attend universities across Manchester, only 27,195, some 34%, of them are housed in private rented accommodation.

Manchester is a rapidly developing city where a rising student population has driven several major new schemes to emerge with significant investment being made in the Ancoats and Spinningfields areas.

With a booming market and high rental yields to be enjoyed, (typically 6-10% gross) buy-to-let property experts, Property Secrets, are offering the chance to invest in a hands off, hassle free opportunity in Montgomery House, a student accommodation block in the Whalley Range area of Manchester, ideally situated on the edge of Alexandra Park with access to both the leafy suburb of Chorlton and the city centre.

Consisting of 240 individual bedrooms as well as bathrooms, kitchens and living areas priced at just £24,000 for a student pod with a rental guarantee for the first year, this is a fantastic opportunity to invest in a lucrative and secure development destined to make significant returns.

For more information please contact Property Secrets on +44 (0)115 985 3963, email or visit