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Why the General Election will not affect student property

With the results of this years general election firmly in place, there are concerns over what the future will have in store for property investment in the UK

by Mark Burns

It is common for the General Election to cause concerns with property investors in the UK.

Looking at previous election years it has been a visible trend that many investors wait to know what the outcome is before deciding to show an interest in the market.

In 2010, in the three months after the General Election result there was a 23% increase in the sale of properties when compared to the three months leading up to the election. However, according to student property experts Pure Student Property, there is no need for investors to have concerns as making an investment in the UK now is just as good as any other time. For those who want further guarantees, safe in the knowledge that they will not be affected by the election then investing in student property will bring a further level of security.

Unlike the residential and commercial property market, the student property market is a non-cyclical asset and it comes with a low correlation to other markets and economic factors. This was proven during the economic crisis when student property was the only market to experience sustained growth year-on-year.

The student property market is now known as the best performing property market in the UK and during the first three months of 2015 there has been £3.3 billion invested.

There is an ever increasing demand for purpose-built student accommodation (PBSA). Student numbers are also increasing, despite tuition fees rising to £9,000 in 2012 the figure is now at a record high and at the beginning of this year almost 700,000 students had applied. This has been boosted by the reputation of UK universities overseas, with over 5 million foreign students coming to the UK to study.

Students are now choosing PBSA’s and demand is growing for luxury accommodation especially from international students as it adds to their experience of studying in the UK. However, the problem is that supply cannot meet demand especially in those universities that are part of the Russell Group, resulting in many students having to live in properties that are unsuitable.

As a result of this, the average rental value has risen by 3% annually and students are now willing to pay higher prices for this type of property when it becomes available to them. Universities will be able to uncap the numbers of students who enrol in 2015 which means that the number of students is going to increase and demand for this type of property will also increase.

Following the 2010 election there was a rise in tuition fees which came with a lot of controversy but this still saw enrolment reach record figures, this year, although the conservatives came into power many of the parties proposed to change things. Labour planned to reduce to tuition fees to £6,000, the Green party would completely remove tuition fees and UKIP would waive tuition fees for those who studied science, technology, mathematics, engineering and medicine.

However, the demand for high quality PBSA looks as though it is going to continue to grow for many years.

*This post was published according to the "Contributed Article Terms and Conditions"

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