The recent student accommodation introduction has proven very popular but we are still taking replies; until further notice anyway!
We note Money Observer offers some words of advice on student accommodation in its latest issue. Let’s quote, ‘Demand for student accommodation remains on the up, undimmed by recent tuition fee hikes.
In its latest annual report on the student accommodation market, property consultant Savills asserts: ‘The student housing market has been a resilient and stable investment during the downturn and that is forecast to continue.’ The report, UK Student Housing, forecasts a total return of 9.3 per cent for the 2013/14 academic year.’
‘As well as offering healthy rental yields, student accommodation has a number of other features that can make it an attractive investment. For starters, it has a low correlation to more traditional asset classes.
Adam Davis, director of fund distribution at property investment firm The Mansion Group, explains: ‘While most other asset classes struggled during the downturn in 2007/08, the fundamentals remained solid for student accommodation. Constant demand means it can deliver a predictable income stream.’
Indeed, the supply/demand ratio is the key strength of the student accommodation market. Although student numbers dropped off in 2012 when tuition fees were increased to up to £9,000 a year, intake rates have returned to the levels seen in 2010 (with 2011 discounted, as it was a bumper year with undergraduates looking to beat the tuition fee hike). While student numbers are stable, there is a continuing shortage of property.’ More to follow.
Fixed rate mortgage deals look set to rise soon as money market rates have been climbing. As such, lenders are expected to push up rates shortly. How much? Put it this way, over the past week or two, five year swaps have risen by about 0.25 to 0.3 per cent.
Andrew Hagger at Moneycomms is in the media saying, ‘Money market swap rates increased significantly last week with a massive spike on Thursday. We must now wait to see whether these higher rates hold but already lenders are starting to increase mortgage rates.’
We’ve long been saying that blanket licensing of BTL properties is coming and that, between now and then, you need to check with the relevant local council to see what they are doing regarding BTL in your locality.
Newham Council in London has led the way with a scheme that has been enforced for this year. Figures released by the council show 30,000 licence applications were received, 22,000 licences were issued, 67 prosecutions and 43 cautions were enforced and 2,320 properties have received warning letters.
Newham’s Mayor, Sir Robin Wales, says, ‘It is clear from our consultation that our residents, including tenants in private sector homes, massively back our plans. This scheme shows that Newham is leading the country when it comes to tackling bad landlords who flout the law. One in five unlicensed properties in the borough have been found to harbour suspected criminals.’ I rather think that BTL landlords may resent the implication that many of us are rogues and scoundrels but across-the-board licensing is certainly on its way. Food for thought.
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