According to The Mistoria Group, despite the proportion of overseas landlords with properties in London falling after the referendum and tax hikes, overseas investors are piling into student property in the North West.
While the capital has seen the largest fall, with one in ten homes let this year owned by an overseas landlord, down from one in four in 2010, research from Savills shows the proportion of international investment flowing into the market has almost doubled in the last two years, with £1.2bn coming from Singapore alone in 2016. Around 25,000 new 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 has also seen demand for shared student property soar in the Manchester, Liverpool and Salford, up by 38% over the last 12 months, with the largest hike coming from international investors, up 36% year on year.
Mish Liyanage, Managing Director of The Mistoria Group comments: “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.
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 BTL.
In the North West, an investor can acquire a high quality 3 bed HMO in Liverpool which will house for students, from £120,000 onwards. The return on investment is very attractive too, with 13% -8% cash rental and 5% capital growth.”