Student property has become one of the hottest prospects for landlords in recent years, with many moving away from traditional buy-to-let and toward a student market that often promises higher returns and a much more stable evergreen level of demand.
There's a reason that more than £11 billion has been invested in the sector in the last three years alone, and for those not already doing so, the temptation to get involved in a market consistently performing well must be there. But when is the right time to invest in student property? Do current market conditions change that? And when should you be looking to market student property for the coming academic year? We take a look at a few of the best tips.
Don't (Brexit) panic
The Brexit vote delivered towards the end of June has already had an impact on the market across the country, with buy-to-let investors either looking to offload properties as they fear a drop in demand, and others deciding to wait and see for the time being rather than putting more money into a market that generally has an uncertain future at the moment.
However, experts have been telling landlords not to panic. We don't know yet that Brexit will be bad news for property, and for the short-term at least, little should change. On top of this, many letting agents are actually expecting that in terms of rental property in general, there won't actually be that much change in the way the market performs heading forward.
For example, two-thirds of those questioned by the Association of Residential Letting Agents (ARLA) said that they don't think there will be any great drop in the number of rental homes available, while 55 per cent also believe that tenants, and subsequently demand, will not dwindle, meaning landlords really would not have that much to worry about for the next year or two at least.
When it comes to student property, those looking to invest can pretty much guarantee that this latter point will be true. Student numbers are up again this year, and the number of people looking to rent private student accommodation as a result will be climbing. And with Brexit unlikely to affect the rental market in any catastrophic way any time soon, it makes sense to invest now in a market that only gets stronger year after year, especially given that many others will be missing the chance to do so.
Speaking of the way others act in the property market, the rush of homes coming up for sale in the next month or so should be a tempting reason for people to start to look towards student property investment. In any given year, summer marks a rise in the level of stock available for sale, but this year it will be even greater.
The reason why there's always so many rental homes available to buy in the student market throughout June and July is simple. Students will start to head home for the summer months at the end of May following their exams, leaving properties vacant throughout the next few months. Many landlords do not have the capacity to be able to deal with the few months of void period this brings up, and as a result they will be looking to offload their student properties to someone else to take on.
For those who can afford to, this time of year represents perhaps the best time to invest in student properties. The rush of homes coming to market for the above reason means that there are many available properties around, pushing prices down as landlords don't have to compete with each other to secure stock. This makes it perhaps one of the cheapest times of the year to invest, and a good time to look towards student property.
And of course, with the fears over Brexit likely to rock the market throughout June and July, there will be even more homes available to buy this year than normal as many choose to jump ship from the lettings market, meaning those with a savvy eye for a bargain could get themselves an even better deal than they normally could at this time of the year.
When it comes to marketing property, many investors will make the mistake of thinking that they need to leave it until later in the summer, when the majority of students will start to look for homes. August tends to be the prime month for this, with UCAS applications coming to fruition and more and more people starting to find out exactly where they will be going to attend university in the year ahead.
However, the private market tends to lean more heavily towards returning students, and many of these will already know what they want. It's important as a landlord then that you try to strike when the iron is hot. While new students will look at the end of the summer, those going into their second and third years will want to know where they are going to live from September before they head back for summer, meaning that June and into July is the perfect time to start marketing properties to students.
Sure, the market tends to be quite busy at this time of year given that more and more student homes are becoming empty when existing tenants move out, but it gives you longer as a landlord to find someone for the coming year, meaning there's no need to panic in August and even into September when you're really trying to catch the tail end of the student demand. Getting tenants on board now means you are sorted for the academic year ahead, and you give yourself that peace of mind that your investment is going to be reaping rewards for the next few months in one of the hottest markets around.