Property experts are predicting that the average cost of student accommodation rental income will rise by 10% in 2009, as demand outstrips supply and that is why investors are turning to the niche market of the student housing sector.
In a grim property market, student housing is one of the rare areas that can still offer good investment, it is unique in that it is under supplied and therefore able to guarantee increasing rental income. In contrast to other residential and commercial property where not only have capital values fallen but so too as the rental income.
As Property broker Savills point out;
“Pension funds had their fingers burnt in commercial assets where if a big tenant drops out, the entire building is vacant; but if a student drops out, you still have a hundred more ready to take the room.”
Savills also say that Pension fund managers are contacting them at the rate of two a week as rents for other assets such as shops, offices and factories are forecast to fall 15% this year.
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