Mark Robinson, managing director of Fraser Morgan, looks at the different factors that will shape the UK property investment market in 2019 and why investment in student living developments will remain attractive.
Writing a piece looking at the year ahead in property investment is perhaps hardest at the beginning of 2019 than in any other year over the last decade.
The reason is, of course, the obvious economic uncertainty surrounding the UK’s departure from the EU, which is now coming to a head. But if we put this to one side, there will be, as there always is, some great opportunities in 2019 for shrewd investors.
The key to success will be focussing on the underlying fundamentals of the market. Some of these factors will include.
Growing populations in the big cities
Cities with thriving local economies and industries will remain a strong target for buy to let investors. This is particularly the case for cities with young, growing populations where there is high demand for city centre living.
Trendy city locations within Manchester, Birmingham, Liverpool, Newcastle and London are expected to see significant population growth over the next 20 years.
It means that quality, stylish homes and residential developments in these city centre locations can be a hot ticket for investors.
Student growth and graduate retention
Going hand-in-hand with organic population growth in these thriving cities is their ever-growing student populations. Cities like Manchester, Sheffield, Leeds, Preston and Birmingham are seeing an influx of young, talented people eager to stay in those cities when they graduate.
This popularity with students and the high graduate retention rates, provides these cities with a vast talent pool and encourages more businesses to locate and expand there.
Again, this makes these locations a sound buy to let investment proposition, particularly for high-quality student accommodation schemes and homes aimed at young professionals.
An urgency to solve the housing crisis
Despite all the distractions surrounding Brexit, the UK housing crisis isn’t going away and the UK is falling further behind its new homes target with each passing year.
A cross-party report released this month predicted that England needs three million new social homes by 2040. For cities experiencing strong population growth, and the commuter belts that surround them, the demand for new homes is overwhelming.
This presents developers and investors with opportunities, particularly if government pledges more money to support the delivery of those new homes.
The search for meaningful returns
With Brexit likely to continue influencing the stock market, and savings rates remaining depressed, finding the right property investment opportunities in the right asset classes remains crucial.
That means for investors taking a medium to long-term view, property will remain an attractive proposition.
As the factors above indicate, investing in purpose-built student accommodation in the right locations can be an attractive proposition and provide strong returns.
Fraser Morgan specialises in the development of quality student living projects aimed at investors. We are able to offer these developments on either a land only basis, or as a turnkey investment. For more information, contact Mark Robinson.