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Students key to buy-to-let market

Monday, 10 December 2007 12:00 AM

Student properties will provide an investment safe haven for buy-to-let landlords during 2008, according to investment experts Assetz.

Despite the potential of moderating prices in some sectors of the housing market during the next year, buy-to-let investors are being urged to add properties in close proximity to universities to their portfolios.

In recent years student rental levels have been growing consistently, fuelled by an increasing student population, leading to demand for suitable living accommodation outstripping supply.

According to estate agent Savills, student rental prices have increased 31 per cent in the previous two years - faster than most sectors of the market.

"In today's climate it is essential that the serious investor is continually adapting their portfolio to secure the best possible returns for their cash invested," said Stuart Law, chief executive, Assetz.

"Student property has such high income that you can often repay a mortgage within 20 years, making it one of the most lucrative investment opportunities in the current market."

According to Assetz, student property can provide yields of between six and 7.5 per cent in the first year.

"Student numbers have significantly increased over recent years, yet the majority of university campuses are not able to keep up with demand."

As a result, there is a huge increase in the demand for privately-owned student accommodation, with top student towns offering a near-guaranteed and fast-growing rental income and a constant and growing supply of tenants," concluded Mr Law.

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