New research by the property investment group Mistoria has found that a third of landlords who have invested in student accommodation plan to expand their property portfolio in 2016.
The research concluded that the student accommodation market will continue to grow in this year. An example of the type of returns that landlords can make is a house for four students purchased in North West England for £160,000. Landlords can expect a 13% a year return on their investment, 8% from rents and 5% from the increase in the value of the house.
A quarter of students are in purpose-built student accommodation. Many developers are currently building new student accommodation. These developments are costly, but for investors without access to the millions of pounds needed to build a new student housing block, there are plenty of properties available to buy to rent out to students.
Not everyone that buys property to let to students is a professional landlord. Many parents find that it is cost effective to purchase a house for their son or daughter to live in whilst at university. The cost of mortgage repayments can be offset by charging rent for other students that live in the house. If a member of the family lives in the home, it becomes what is known as a regulated buy-to-let, and some lenders may place restrictions or conditions on the mortgage.