Savills said that student rental growth had far outstripped current rental growth in much of the market, fuelled by an increasing student population, and urged investors to consider adding a student property to their existing portfolio.
It pointed out that universities had limited capacity to increase the supply of accommodation, therefore providing great opportunities for investors.
The UK currently has £6.6 billion worth of private student halls and it is expected to rise to £20 billion in the next few years. Commentators believe that this type of private accommodation will replace traditional university halls that are low quality and in poor locations.
Stuart Law, chief executive of Assetz, said: “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. 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 market.
“Student numbers have significantly increased over recent years, yet the majority of 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 rental income.”
Ying Tan, managing director of The Buy to Let Business, said: “Students often pay by the term and this is fantastic for cashflow. Renting on a room-by-room basis, as long as you comply with HMO licencing, provides greater yields than it would renting to a family.”
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