Best International Property Investment: Student or Residential Buy-To-Let?
Let's explore the differences between the two as well dive deep into differences in property types, the common Student Housing deals and types of Residential Buy-to-Let deals you can find in the Manchester and Liverpool areas of the UK.
Student Property Investments
In recent years, big cities such as Manchester and Liverpool have seen a surge in student accommodation investment. Some at the luxury end of the market – high-quality purpose built blocks – others terrace houses in traditional student areas.
Student housing is seen as a safe bet for some investors, with the annual arrival of new and multiple tenants each September. Its yearly routine not only makes financial forecasting easy it also brings consistency. Some investors even buy property when their own children go to university then hold onto houses as investments. New developments include the 776-bed space St Luke’s View.
Research by Cushman & Wakefield a real estate company – C&W’s UK Student Accommodation Report 2017/18 – reveals the boom in student accommodation schemes hit new levels in 2017, and reports that 30,000 bed spaces were delivered nationally in that year.
Manchester hosts 23,578 purpose-built student accommodation bed spaces and has the UK’s second largest student market. Over the last five years, the city has seen a 20% increase in students from outside the UK. In Liverpool the 2017-2018 academic year has seen the supply of purpose-built student accommodation bed spaces total17,080, of which, 1,844 beds were new for the current academic year.
During the last three years, more than 5,800 bed spaces have been brought to the market in Liverpool. This has increased the total supply by 50%. And it’s this that has led to competition, meaning rental increases have slowed down. With such a healthy student accommodation scene in the North West, all of this points to one thing…that property investment in this market is a top consideration for investors wanting to play their part in this exciting area of growth.
Residential Property Investments
Variations in rental growth and yields over 2017 are a good indicator for buy-to-let residential property investment, showing the most promising areas/regions. Those with limited or low capital may want to look for better yields and should look to northern cities that are dominating UK growth. Cities such as Manchester and Liverpool are real contenders and amongst the top for property growth in the buy-to-let market. Investors take note.
Manchester, Liverpool and other big cities north of the Watford Gap offer affordable buy-to-let investment property. These factors, coupled with a growing population of young professionals looking for housing are good signs. And with the likelihood of this translating to strong rental values and rental growth, along with, capital appreciation – it’s what all investors yearn for.
There was a 3.1% rise in the number of buy-to-let mortgage applications from the North West. And Liverpool is one of UK’s best performing property investment locations for landlords, with the average net rental yields of 6.2% according to research by Private Finance.
Finding the right buy-to-let location in the North West or any other region needs a strategic approach. If the initial investment is too large it makes it very difficult to achieve a healthy yield. But landlords must also be confident that the investment in property will appreciate at a higher rate than mortgage borrowing in order to achieve the end goal: long-term profit.
The buy-to-let sector isn’t without its challenges. But the one area where landlords have benefited is falling mortgage rates. Because of this, seeking independent advice is more important than ever. Landlords must understand the terms and conditions in order to find and be accepted for the best deals, so they can make good investment choices that work for them.
Hope you enjoyed my real estate investing article on International Student Housing vs. Residential Investments.