Property investors can expect higher returns by investing in modern student accommodation projects compared with buying other types of assets.
This is according to Knight Frank, which released its Student Property report for 2014 earlier this week, commenting that there is a “positive outlook” for the market.
“Total returns in the student accommodation sector have outperformed all other traditional asset classes,” the report stated.
Investor returns for student property in the UK for September 2013 was 7.8% on average, which is significantly higher than the rental yields for average buy-to-let properties at 5.4% for the same month, according to LSL Property Services.
Knight Frank also predicted there will be further rental growth in 2014, increasing by 2.75% in regions and 3% in London over the year, which will translate into a rise in rental yields for investors.
The report went on to forecast 2014 as seeing “increased rental growth, sharpening yields and improved investment performance for existing funds”.