May 03 2020

UK Property Investment News Roundup: April-May 2020

May 03 2020

UK Property Investment News Roundup: April-May 2020

Author: Matheen BukhariCategory: Manchester, UK Property
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Select Property Group has reviewed and collated some of the latest news and research published online by the UK property industry, including the latest investment forecasts and trends.

Here’s a selection of some key UK property investment news stories published in April 2020, with links to the original sources where you can read the full detail.

Purpose-Built Student Accommodation and the Impact of COVID-19

In April, both Knight Frank and Savills looked at what the ongoing pandemic means for the UK purpose-built student accommodation (PBSA) sector.

Firstly, Knight Frank notes the potential disruption COVID-19 could cause to the new academic year, starting in September. It states that UK universities must continue to wait before assessing what impact ongoing travel restrictions may have on their ability to attract international students for 2020/21.

However, the report believes that “despite these short-term impacts, there are positives to draw on from the long-term resilience of UK higher education and the accommodation that supports it”. It cites the sector’s performance following the 2008 financial crisis, which resulted in an increase in student applications from young people looking to gain crucial skills in the global job market.

It also states that “the investment case for student property also remains compelling”, explaining that overall returns from PBSA “have held up against previous drops in real estate activity”.

Read: How Will Purpose-Built Student Accommodation Markets React to COVID-19? – Knight Frank

The research conducted by Savills tells a similarly positive story for the future performance of PBSA investments. In its report, Savills declares “three reasons why the PBSA sector still looks like a good choice for investors going forward”.

Like Knight Frank, Savills acknowledges the performance of PBSA following the 2008 financial crisis, stating that the “PBSA sector was one of the few asset classes to show resilience” and “provided investors with robust returns”.

It also points to the significant undersupply of PBSA in major European countries. Should, as predicted, student numbers continue to increase long-term as a result of the pandemic, Savills says that illustrious institutions – such as those universities in the UK – “may well see competition for places – and accommodation”.

Read: How Resilient Is the Student Housing Market During the COVID-19 Pandemic? – Savills

UK Build to Rent and the Impact of COVID-19

Savills has also analysed the build to rent residential UK property market.

As with PBSA, there is likely to be a short-term impact for build to rent owners as a result of COVID-19. But Savills predicts that, in the long-term, the “coronavirus lockdown is unlikely to dampen investors’ growing appetite for the sector”.

The report cites the undersupply of rental property across the UK; a shortfall it says is “likely to continue and become more acute”. It also points out that, looking at historical periods of wider economic uncertainty, rental growth has a track record of “less volatility” when “compared with other real estate sectors”.

Read: UK Build to Rent Market Update – Q1 2020 – Savills

Surge in Demand for UK Property from Chinese Investors?

Finally, PropertyInvestorToday published a story on the 24th April which suggests that a “Chinese-led house buying boom” is currently underway in the UK despite the ongoing uncertainty surrounding the coronavirus.

The portal was quoting Domenica Di Lieto, the CEO of Chinese marketing consultancy Emerging Communications. Ms Di Lieto explained that the fall in the value of the pound, coupled with the first phase of lockdown restrictions being lifted in Asia, “has sparked a new high in the level of Chinese interest in buying residential property in Britain”.

In addition, the article also quotes research from one of the largest private education firms in China which states that the UK is now the number one destination choice for Chinese students studying abroad. Consequently, it explains that “Chinese residential property acquisitions in the UK are largely dominated by the parents of children studying at UK universities”.

Read: Revealed – Chinese Interest in UK Property Soars Despite COVID-19 – PropertyInvestorToday

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