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Iceni Magazine | March 23, 2019

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Why PBSA is great for overseas investors

Why PBSA is great for overseas investors

The purpose-built student accommodation market is one of the UK’s most lucrative investment opportunities.

Home to four of the most highly ranked universities in the world, it’s no wonder that the UK is attracting so much investment into its student market. The PBSA market is particularly appealing to overseas investors, with five of the biggest student accommodation deals of 2016 having been made with international investors. Here are some of the reasons why foreign investors should consider UK student accommodation for their next property venture.

The UK welcomes foreign investors

Unlike some other EU countries, the UK is welcoming towards overseas investments, with no restrictions in place that might limit foreign investors. Investing in UK property is a lot simpler in than in other countries, with the UK boasting the lowest corporate tax compared to France, Germany, Italy, Canada, Japan and the US. Back during the time of the EU Referendum, many expected rates of foreign investment in the UK to plummet, whereas more student property was purchased during the six months after Brexit than six months prior to the result.

Student property offers high rental yields

Purpose built student accommodation offers some of the highest rental yields in the UK property market. In recent years, there’s been a shift in the type of properties students expect, with more high-quality and luxury accommodation becoming the new norm. Students want a place to stay during their studies which is comfortable, modern, well located and fully equipped with amenities like super-fast WiFi. This changing attitude of students has resulted in over a fifth of students being more willing to pay £160 or more per week on accommodation. With low property prices and high rental costs, the yields of student property are some of the most impressive out there. RW Invest, for instance, is a property investment company offering UK student accommodation from as little as £45,450 with 8% rental yields.

The UK student population is high

With a growing student population, the demand for student accommodation is always high. The academic year of 2016/17 saw a total of 2.32 million students in UK institutions, with 2017 reporting the highest numbers of 18-year-olds landing a place in a university in the UK. Amongst the student population in the UK is a large number of international students, with around 450,000 overseas students having enrolled in a UK university in 2016/17. Chinese students make up the largest percentage of those from non-EU countries, with around 95,090 students travelling from China to study in the UK. Certain cities such as Manchester and Liverpool offer some of the best student property investment opportunities due to their high student populations, with Manchester being home to around 85,000 students and the largest single-site university in the UK.


 

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