Although recent research shows that the proportion of international investors with properties in London has hit a new low this year, following Brexit and the Chancellor’s tax hikes, overseas landlords are piling into the student property market in the North West, according to The Mistoria Group.
While the capital has experienced the largest decline, with one in ten homes let this year owned by overseas landlords – down from one in four in 2010 – research from Savills shows that the proportion of international investment flowing into the UK market has almost doubled in the past two years, with £1.2 billion coming from Singapore alone in 2016.
Around 25,000 new student accommodation units have been completed for the start of this academic year, while a further 14,000 are already under construction for next year.
The Mistoria Group, which specialises in high-yielding property investments, has seen demand for shared student accommodation soar in the North West – up by 35% in Liverpool alone over the last 12 months.
Mish Liyanage, the Managing Director of The Mistoria Group, says: “It’s no surprise student property in the North West is booming with international investors. A north-south divide has opened up in the buy-to-let market, as a result of soaring property prices in London and the South East, which has made the region unprofitable for investors.
“The tougher tax measures, political uncertainty and falling house prices in London have led international investors to look for alternative asset classes, farther afield. Many have been attracted by the high yields in the North West, which boasts the ten best buy-to-let locations in the UK, while the south has the ten worst locations.”
He explains: “The type of international investors who were originally investing in the super-prime apartment bubble are now channeling their money into student flats and shared accommodation. Student property is the fastest growing sector of the market, giving investors strong returns that are well ahead of standard buy-to-let.
“In the North West, an investor can acquire a high quality three-bed HMO [House in Multiple Occupation] in Liverpool which will house four students, from £120,000 onwards. The return on investment is very attractive too, with 13% – 8% cash rental and 5% capital growth.”
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