A rise in the Chinese student population benefits UK property market, writes Rosemary Playfair
Investors from China are cashing in on the opportunities provided by a drop in the value of the British pound and increasing yields and rents in the UK buy-to-let market, particularly with student flats. The Chinese student population in the UK has grown by 34 percent in the last five years and China now sends more students to the UK than any other country in or outside the EU.
Grant Property, leading UK based property investment company, reports a surge of interest from China as new and existing investors are purchasing more buy-to-let properties to add to their portfolios. An increase in rents as much as 15 percent over the last 12 months alone, combined with steady long-term capital growth (on average 7 percent per annum) and prices in regional UK cities rising at their fastest rates for 10 years, are factors making UK property an appealing investment prospect.
Student accommodation is the jewel in the crown for the property investment market
“We are seeing a huge demand from investors from China, some of whom are looking to buy multiple properties each,” says Peter Grant, founder of Grant Property. “In the last year we have sold over £33 million worth of properties to investors and we are currently dealing with 20 percent more enquiries than this time last year. Investors have seen returns of up to 28 percent per annum over the last 22 years. From China alone, we have gone from one client to 30 clients in a few years, and we are currently dealing with dozens of enquiries.
“Investors are capitalising on the opportunity to snap up traditional flats in UK cities, particularly where there is a large student population. The focus is on traditional refurbished properties in good city centre locations, not purpose-built blocks on the edge of town, which tend to attract mainly first year students.”
“Student accommodation is the jewel in the crown for the property investment market,” says Grant. Student accommodation is not subject to the same economic or political influences as the rest of the property market. Even in a recession, occupancy is very high, so rentals are virtually guaranteed. And high demand delivers high yields. UK universities and colleges are very popular with Chinese students, expats and UK students alike. Parents are recognising the virtues of buying property for their student son or daughter to offset tax, save on rental outgoings and even generate income from letting out a spare room.
Overseas investors in UK property are now outnumbering UK investors and, according to Grant, that is likely to continue.
“Most of our enquiries are coming from overseas now and that is showing no sign of changing. The latest figures for the Chinese student population in the UK was over 120,000, and that doesn’t even include the number of expats living in China, many of whom want their children to study in the UK. A lot of expats want to invest in property back home to build security for their future. I expect the numbers to continue to grow as the UK’s higher education system carries a lot of prestige in China (and indeed the rest of the world), and students achieve impressive qualifications.”