Regional student accommodation does best for investors

Regional student letting accommodation is the best-performing property investment asset in the UK, says a new report by Knight Frank.

It says that regional student accommodation outperformed all other property assets.

It puts total returns for regional student accommodation at 14.65% last year and names Kingston, Brighton, Edinburgh and Durham among the top locations for investors.

While student rents outside London went up by 4.1% last year, in London they fell by 3.6% – despite a huge shortfall in accommodation.

The report predicts that demand will increase as students abandon gap years and rush to beat rises in fees due to kick in from September 2012. The latest application figures from UCAS show a 7.7% increase from non-EU students.
 
James Pullan, Knight Frank’s head of student property, said: “There have been record applications for university places this year. Once again, students will find there is an under-supply of student accommodation to meet their needs.

“The student accommodation sector is now recognised as forming a critical component of a balanced investment portfolio. Total returns in 2010 for student accommodation in the regions outperformed all other property sectors.

“With 40 higher education institutions, London has the highest concentration of students in the UK but a structural undersupply of student accommodation providing value accommodation at an affordable rent. We consider London needs a further 100,000 student bedrooms.”