The research found that sales of student property to international buyers is up by a massive 185%, year on year.
The biggest jump has come from investors in Hong Kong, where the numbers have trebled, followed by India, up by 220%, the Middle East up by 130% and Singapore up by 90%. The research also reveals that new international markets are opening in Canada and Australia, where demand is growing fast.
London is better known for attracting international investors, particularly from Kuwaiti, Qatari, Saudi and Iran, who are acquiring top-end, luxury property in the City. However, the Mistoria Group reports that student property is becoming increasing attractive to international investors because of the high yields and occupancy rates.
Mish Liyanage, Managing Director of The Mistoria Group comments: “We have seen exponential growth in demand from international investors wanting to purchase student property. Although many investors are attracted by the high performing yields of houses of multiple occupation (HMOs), the UK’s outstanding education system is a key part of the attraction. Many international investors want their children to have a school or university education in UK and they will buy a student property as a base for their children.
International investors have always considered the UK property market to be one of their favourite asset types. It offers investors safe and secure returns and we are expecting to see continued growth from international buyers.
The Bank of England has estimated that the number of UK homes sold to international buyers is about 3% across the whole market. We estimate that this is going to continue to rise over the next 5-10 years as the UK property market out performs many other markets for yields and capital growth.
Over the last 5 years, student properties in the North West have generated yields in excess of 13% and geared yield in excess of 35% in Salford and Liverpool. An HMO property can provide an 8% minimum cash rental yield and a typical 13% total cash yield, including 5% capital appreciation.
Our research shows that the North West provides greater returns than any other region in the UK. This is fuelled by the massive regeneration taking place in Manchester, with the proposed High Speed 2 (HS2) high-speed railway between London Euston and the North West to be completed in the next 15-20 years.
To help international investors acquire UK student properties, we have created a new division Mistoria International, which will be based from our Manchester Office, which is opening in August 2016. We have also created a new website. www.mistoriainternational.com, to help facilitate investments to UK, as well as assisting UK citizens to manage their overseas portfolio in countries where we have a presence.”