Is Cardiff a good place to invest in student property?

With a 10% increase in the amount of students in Cardiff over the last five years, is the city a good place to invest in Cardiff student property? With close to thirty-thousand full-time students enrolled in Cardiff on full-time university places, and university-owned accommodation not satisfying the demand requirements, it would follow that student property investments would appear profitable.

A new index developed by Knight Frank supports this, showing that student property follows closely behind the average returns from all residential property, which when the average investor can’t afford to buy an office block shows that this market sector is extremely strong. Many of our landlords will have noticed the market is changing. Students require properties up to a higher standard and fringe locations do struggle more than they used to. Through periodic inspections, CPS Homes have been advising landlords on how best to maximise the value of their investments and are assisting some landlords in splitting larger houses into apartments to gain larger returns.

Our landlords will have seen in the news the tuition fee increases.  It is worth noting that The Welsh Assembly is assisting Welsh domiciled students who are liable for the first £3,375 of their fees which is met via a loan from the student loan company and the balance over £3,375 will be met via the Welsh Government via a tuition fee grant.

Every student property in Cardiff is different and good management will go a long way to ensuring that your property makes the returns it should, but with average returns across England & Wales at over 13.5% (taking into account rental growth and capital growth), and Cardiff sitting in the top twenty places to invest in student property, then yes, it would suggest that Cardiff is a good place to invest in student property.

25 May 2011

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