Student accommodation investment UK is a great option for property investors as it involves less hassles, yet rewards with high returns on investment.
Investment in student accommodation investment UK has a number of advantages as such a property remains occupied round the academic year if it is located at the right place. This means a secure inflow of rental income over years. Moreover, renting to students is easy as they are less demanding and adjust to any situation. They are more interested in the location of the property and the number of rooms at the property rather than the fancy and luxury aspects of a property. Although, the demand for luxury student properties is also rising as some students are prepared to spare a few pounds in return for better facilities.
As the UK property market continues to grapple with the challenges of undersupply of homes and high property costs for first time buyers, co living brings in a new perspective that may help to mitigate the impact of insufficient housing. This may prove to be beneficial for expensive cities in particular as traditional housing in these cities are costlier than some of the other cities across the country. Another advantage of this type of student housing is that it frees up homes for other categories of tenancies. This means more homes are available to families and professionals, reducing the stress on available homes. As a result, co living may contribute to the solution of the housing crisis in the UK to some extent.
Co living properties are gaining in popularity in major cities across the UK and other parts of the world. They are proving to be affordable to students, so the demand for this type of property is growing. Cities like London and Cambridge are witnessing growth in this space which hold promise for the rest of the country.
Millennials are now preferring co living over the traditional form of student living. They prefer living with those with similar interests and outlooks. The co living properties can accommodate higher number of tenants as they have separate living spaces for students, with shared areas which releases space out of the property. These properties are cheaper than traditional student living which make them attractive to students.
Research carried out by BBC Radio 4 and the Wellcome Collection last year showed that young people were the most likely group in the UK to experience loneliness. Four out of ten 16 to 24-year-olds said they felt lonely on a weekly basis.
Scott Corfe, chief economist at the Social Market Foundation think tank, published a report this year titled ‘Co-Living: A Solution to the Housing Crisis’. He highlighted the flexibility of the concept and said, “there are opportunities to have co living projects that are both part-ownership or rent-based. What underpins both types of co living is the idea of having communal spaces or facilities in between private rooms or housing.
The benefits of co living are being noticed by developers and the student accommodation investment UK in the sector is rising. It is becoming popular since tenants, especially students, find it increasingly difficult to find an affordable living space, particularly in cities where accommodation comes with high price tags.
Co living and community housing can also be a useful tool for urban and community planning as it helps promote cohesive and integrated communities.
Investment in co living is rising as students are opting for co living since they are being priced out of the big and expensive cities. This is more so for international students as international education involves high levels of expenses. A number of factors such as growth of cities, pressure on housing, living costs and changing demands from the student community are all contributing to the need for innovation in the student property sector, and co living student accommodation seems to fill the gap. Students are looking for cheaper places with better facilities and co living is proving to be answer to that.
According to real estate services firm JLL, global funding in the co living space has increased by more than 210 per cent annually since 2015, reaching a total of more than US$3.2 billion (£2.5 billion). A market report published by the company in June revealed that $800 million of investment had already been secured this year, with a further $283 million in the pipeline.
David Martin, who leads JLL’s US multi-family investment sales platform, said the growth of co living is “absolutely tied to affordability in major markets”. An increasing number of people who want to live in economically prosperous but expensive locations are changing the way they think about housing arrangements. He also highlighted the potential for this concept to catch on in various destinations around the world.
“The established multi-family markets lacking affordability are not only found in the US, but also Germany, the UK, Hong Kong and India, meaning that co living space is set for rapid expansion globally,” said Mr Martin.
The European total of co-living beds built or in development is just 23,150, with almost two-thirds of those launched within the last two years. The sector has grown to almost 25,000 beds in the last two years and will continue to grow at pace as more markets emerge, according to the research.
Co living is certainly a significant trend that may turn into an established sector over the years. It may have a strong impact on the student property sector and generate more interest among investors in the future.
According to Propertymark, co living investment can now be seen as a “global movement” that understandably appeals to younger generations dealing with “rising rents and chronic loneliness”.
This trend in student property is encouraging for investors as it means more choice and variety in the market. It opens up new student accommodation investment UK opportunities for investors to diversify the portfolio with potential for growth.
So, co living is coming. It means a potentially large new sector will open up for student accommodation investment UK. A number of investors are already keen to tap into new student accommodation trends. More investment in this student accommodation space may take the pressures off the traditional student accommodations. With letting period of around one year, it is also incredibly easy for landlords to find new tenants and they can focus on enhancing student experience by adding value to the investment.