Student property investment has captivated investors in Southampton and Portsmouth delivering above average yields / return of investment in comparison to other student regions and other buy to let properties. Posh Pads are able to share 20 years of property investment and development experience offering hands off investment opportunities to landlords in quality student houses that tenants feel at home in.
Private halls of residence, student pods, studios and flats attract a great deal of investment encouraged by low purchase prices and property developers offering guaranteed income. Whilst presenting a reduced risk investment these options fail to deliver when considering capital gains, exit strategies, ability to change property management style or rival a student’s preference of a house with larger living spaces, gardens.
Following the introduction of the Article 4 Housing of Multiple Occupation planning initiative and additional HMO licencing introduced in Southampton and Portsmouth the availability for student property investment has been capped at a 10% threshold. These new regulations place significant impact on heavily populated regions of Southampton & Portsmouth including The Polygon, Portswood, Highfield & Southsea with the legislation designed to prevent further large areas of student properties whilst maintain a level of local residents.
All three Universities are imminently planning to expand their student base as demonstrated by their current building projects. Supported by high youth unemployment, despite the rise of tuition fees, applicants to University places has risen by 3% (UCAS) creating further need for student accommodation. In Southampton alone over £110m is currently being invested into first year hall of residences creating space for a further 1,600 new students. The University of Portsmouth currently has plans to convert existing buildings to provide further student accommodation; in Victoria Park (opposite the Anglsea building) and further academic and halls are being built.
According to the Land Registry house prices in popular student locations throughout Portsmouth & Southampton have, in general, remained stagnant since 2007 whilst in average rents have increased by 24% (to date). A glass ceiling of house prices has been created by stamp duty with low interest rates and economic growth, property values are likely to start increasing and push this upper limit, generating additional capital gain.
The Independent Newspaper explains both of the key locations targeted by Posh Pads deliver an average yield of 8% per annum whilst our 12 month contracts guarantee rental income and minimise the opportunity for voids. Combining a student property investment with a buy to let interest only mortgage can deliver an 18 – 25% return per annum, cash buyers in a strong position can also use this method to build a portfolio.
Looking to purchase a student house presents many benefits over investing in a commercial student flat / apartment / pod. Both Southampton and Portsmouth locations offer the ability to purchase houses of multiple occupations in close proximity to Universities, delivering strong yields with the potential to earn further capital gain. Increasing student numbers coupled with limited property availability, low interest rates and economic growth provide a strong case for investment.
Posh Pads offer a full student property investment service allowing the purchaser to be as hands off / on as they wish. With the benefit of already commanding a strong market presence as a market leader Posh Pads is able to share experience and knowledge creating a mutually beneficial relationship. If you are looking to invest Posh Pads offer property finding, building / development, tenant find and full property management services, aiming to deliver a student house your tenants can be proud to call home.
Whether you are simply looking to gain an insight in to student lettings or are a seasoned landlord / investor you can organise a meeting or discuss ideas by contacting Posh Pads here.