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Before we look at the priorities and expectations of today’s rental market across the residential and student sectors, let’s take a look at the advantages and disadvantages of investing in each.
Purpose-Built Student Accommodation (PBSA)
PBSA is designed, developed and managed to deliver a high-quality living experience, and has established itself as the strongest student property sector with high demand from domestic and international students. Amenities typically include strong Wi-Fi, communal working spaces, building management and security, a gymnasium, events hubs and more. Find out more about the different types of student accommodation in our Guide.
In recent years, the Build-to-Rent sector has raised the benchmark for premium rental living and is the modern city-centre home of choice for millions across the UK. Emerging as a sector, Build to Rent accounted for just 4.2% of all new build completions in 2018, climbing to 5.8% in 2019 and to a further 6.6% last year. Directly responding to the tenant demands of today, amenities typically include access to strong Wi-Fi, communal outdoor space, co-working areas, resident hubs, a gymnasium, a pet-friendly policy and more.
The key to making a high-demand property investment to deliver strong returns is understanding your tenants. By delivering on their wants and needs, you can expect healthy returns and a high retention rate.
Although both tenant groups are of different demographics, there are many similarities in the expectations of today’s property rental market. Amenities such as access to strong Wi-Fi, a gymnasium, co-working space and communal outdoor areas are non-negotiables for many tenants across both groups – trends accelerated by COVID-19.
Let’s compare the top priorities of both groups:
In Knight Frank’s 2021 survey, students living in PBSA were asked which amenities they’d be willing to pay a premium for. Here are the top 5:
Similarly, according to JLL’s 2020 report, Home is… for everything, the top tenant priorities in the residential market were:
Other priorities across both tenant markets are bright and modern interiors, high-quality white goods and 24-7 management. All amenities and services mentioned are priorities of today’s purpose-built developments across both sectors, so by choosing the right developer, investors can rest assured that the demands of their markets are met.
When it comes to making any property investment, the first step is to have a conversation with a property consultant, who will talk to you about your property investment goals, preferences and budget so they can recommend the most suitable options for you. They will then go through projected yields, capital growth, payment options and answer any other questions you may have. For residential property with mortgage options available, you should seek professional advice from a mortgage broker.
As is the case with any investment, you should conduct thorough research before making your decision. Here are a list of considerations to discuss with your property developer:
For Build to Rent property, make sure your development is in a high-demand location with a strong economy, increasing population and high projected growth. Cities such as Manchester and Birmingham are performing exceptionally well, as the North West leads the housing boom with prices up 15%. As for prime PBSA cities, developments within walking distance of Russell Group universities are reliable high-demand investment locations.
Building and tenant management
Both sectors offer fully-managed options, giving the investor a hands-off, hassle-free approach and giving their tenants a seamless experience. For more hands-on investors, residential properties can be managed and tenanted independently.
Rent price expectations
Rent price varies depending on apartment specification, size and location. But by offering luxury amenities and facilities, tenants across both groups will be willing to pay a premium at the higher end of the rental market.
It’s important to make sure you are investing with a credible developer who can demonstrate a strong property portfolio of successful developments and years of real estate experience. Positive investor and tenant testimonials are also a good indication of reputability.
Whether your priority is higher rental yields, capital growth over time, or a hands-off investment from overseas, we can help you find the right investment for you.
At Select Property Group, we offer an end-to-end service for investors – from initial consultation right through to exit strategy via our in-house brokerage. Investing with us starts with a conversation with one of our property consultants, who will talk you through the process from start to finish, arrange a virtual or face-to-face tour and be on-call to answer any questions you may have.
If you need further guidance to decide , get in touch with one of our property consultants on email@example.com to arrange a call.