The experts say there’s always demand for quality student accommodation in central London
Whether you’re a parent looking to secure a nest egg that’ll see your child through uni, or you’ve got grand designs on a conversion or development, tapping into the student market, particularly in central London, can prove highly lucrative. With its array of top universities in close proximity, the Capital offers a unique opportunity for investors. “London is ranked not just as the best student city in the world, but is also the only city with the most top ranked universities globally,” says Anita Mehra, managing director at Benham & Reeves. “In 2022, the number of students coming to the UK to study from overseas was 361,000 compared with 121,000 in 2019. The Capital’s top-ranked universities attract a significant number of international students who are seeking accommodation near their educational institutions and, as a result, the rental market around the campuses experiences very good demand.”
So, whatever else is going on in the housing market, parents and investors alike should look to the rising demand for quality student accommodation as a marker for a good investment. The steady influx of both domestic and international students seeking top-tier university places sees no sign of waning, and that, in turn, fuels demand for suitable housing. “This year, across our network of 21 London branches, we’ve seen a 28 per cent increase in enquiries for student accommodation with demand hard to fulfil, and some students having to book short-term digs until a property becomes available,” says Anita. “This adds extra worry for parents, particularly if it’s their child’s first term away.”
Of course, not all student digs are created equal. Vivienne Harris, owner and MD at Heathgate stresses that quality is key. “It’s all about quality for student accommodation,” she says, “certainly in central London and surrounds. If it’s stylish and contemporary, it is easy to let, but students these days don’t want to share bathrooms etc., so each unit needs to be self contained. Heathgate has handled a number of such buildings where we’ve been able to maintain more or less full occupancy. My advice, if investors are looking to forge a path towards the student market in central London, is to ensure the property is clean and modern with a bathroom and some kitchen facilities within the self-contained units, and to also offer facilities such as washing machines (even if these are communal), ideally lifts, and of course, attractive furniture. It is also advisable to have building managers on site for assistance to ensure that any issues are dealt with in good time. When run well, these can be extremely lucrative.”
Ultimately, investing in a prime London location will have its benefits, and you’ll find stability in occupancy if it’s done right. “The only point to make is that the student year is really only nine months, from September to June,” says Vivienne, “so investors need to be aware of that when building developments or converting property into student accommodation.” Even taking this into consideration, Anita assures us that investing in property for students can offer a wealth of benefits and opportunities, and not just for the duration of a three-year uni course: “Overseas parents have, for many decades, secured their child’s future by investing in London property near prestigious educational institutions. Not only does this type of investment provide a comfortable and more stable living arrangement for their child, but it can provide good long-term income and capital growth. Immediate savings on high rents is just a short-term benefit of investing in a London property. The property’s potential for capital appreciation offers a financial safety net and is a valuable asset that can be used to generate rental income before or after your child’s studies.”
