It’s that time of year when students are finding out about their A level results and I wish them all the best of luck. They will also be finding out if they got their desired university or if they will go to clearing. Finally they will hear about their choice of accommodation.
This year has seen a record number of places being offered through clearing with more than 420,000 students being placed in higher education, which is up 3 % from last year. Therefore next year the number of students looking for accommodation will also go up.
In Medway the university sector has grown with a combined campus of Kent University, Canterbury Christ Church University and Greenwich University at Chatham Dockyard. This has been developed from a campus with 1,200 students to over 16,000 students and the plan is to expand even further with the continued development of the Chatham site.
This means there will be an increase in demand for rooms and new campus accommodation has been built at Liberty Quays, which is part of a new waterside village on the River Medway, offering additional accommodation mainly aimed at first-year students. This is good news for the private rental sector as there has been a steady increase in second-year students looking for accommodation.
In a report in 2010, Medway Council identified that there needs to be an increase of 15,000 dwellings (of all types) by 2026 including private rental for students. The report also says that this can be realised by new builds and conversions.
Therefore, for investment purposes, moving into the HMO student market or expanding on your current portfolio looks to be a good bet. This is also evidenced in the Savills 2015 spotlight on student housing where it says the purpose built UK student accommodation sector has enjoyed robust growth. It also shows that student number demands for accommodation has increased, while numbers of non-EU students have also risen.
The report concludes that student demands will continue to grow – but there is an issue with nationwide supply.
This is reflected in Medway where there is a limited supply of 4 or 5 bedroom homes – with the parish of River containing the largest student population. This means conversions or new builds are more important than ever. However, as I’ve discussed in previous posts on Gillingham student lets and Chatham student HMOs, increasing numbers of investors have capitalised on the demand by creating student HMOs in Medway. Alongside the growing Liberty Quays accommodation and other corporate providers, this means that landlords and investors with student lets in Gillingham should consider differentiating themselves from the competition by refurbishing to a high standard and adding en suites where possible.
Prices have also responded well, Rightmove (using data from the Land Registry) say that last year most property sales in Medway involved terraced properties which sold for on average £193,325. Semi-detached properties sold for an average price of £249,084, while flats fetched £146,147.
The area has an overall average price of £224,018, which was similar in terms of sold prices to nearby St. Marys Island (£234,614) and Gillingham (£221,732), but was cheaper than Upnor (£337,349).
Overall during the last year, sold prices in Medway were 10% up on the previous year and 23% up on 2013 when the average house price was £182,347. This shows that in addition to the yields you will gain from student rents, your property will also gain in value making it a good investment prospect.
Of course, not everyone can afford to build from scratch so finding the right properties to convert is really important. We have experience in both finding and managing properties which takes away the pressure of dealing with day to day issues. So if you wanted to chat about student property investments in Medway, give me a call on 07944 726676 or email me at email@example.com and I will be happy to help.
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