Boom time for buy-to-let investors in Stoke-on-Trent
02-07-2014
By The Sentinel
BUY-to-let properties and student accommodation could soar in value following last week's announcement by Staffordshire University that it is to transfer thousands of students to the city.
Estate agents and lettings specialists said that the huge influx of students from the county town to Stoke-on-Trent could fuel a boom for property owners as well as buy-to-let investors looking for homes in Stoke, Shelton and other areas close to the Leek Road and College Road sites.
By 2016 some 3,000 computing and entertainment technology students will have moved from their current site at Beaconside in Stafford, to the city meaning that there will be approaching 9,500 looking to rent here and a university spokesman said it will be working with landlords to find a solution.
She said: "We are entering into our masterplan phase to be completed by the summer and we will work with the private rental sector landlords and the local authority to find adequate accommodation to house the students who will be moving here by 2016 at the latest.
"We have 14,400 full and part time students across the Stoke and Stafford campuses. After the move there will be 9,300 full time students at Stoke and 3,400 part time or doing distance learning. These are the ones less likely to need accommodation but there will be 9,300 who do.
"While it is becoming increasingly common for students to live at home and travel into the university, the majority will be looking to live here.
"There is no problem at the moment and we are able to offer all our first year students accommodation on campus, in our halls of residence on a first come, first served basis. But in order to accommodate the extra students we are going to have to make arrangements and we are looking at building more halls of residence, as well as working with private landlords.''
Stoke-on-Trent estate and lettings agents have welcomed the news. Justin Ward, of Wards Property Management in Stoke, said: "One town's loss is another's gain, It is a great market out there with plenty of money being invested. Stoke has seen several developments being started and this is exciting as the city evolves. We have the new Lomax Halls near completion and another site in Stoke also being developed at the moment.
"I can see that this will increase not only the cost of the rooms but the amount of student properties required.''
Andrew Johnson, of Keates Hulme, pictured below, also based in Stoke, added: "This is good news for Stoke town and the city as a whole. Retail, which has been in decline in Stoke town for many years, will get a welcome boost from an influx of students. "In recent years and with the impact of students fees, the need for accommodation has retracted into core streets in Shelton close to the university. With some 2,500 extra students needing accommodation it is likely that this retraction will be in part reversed.''
Adrian Knapper, director at Whitegates estate agency in Hanley, said that investors should get in now before the inevitable price rises, saying: "Now is an excellent time to consider buying a property to rent out to students within the Stoke-on-Trent area. The increased numbers of students within the local economy can only be a good thing for investors."
The latest figures from property website home.co.uk show that there are currently 770 properties for rent in Stoke-on-Trent.
The average rent is £450 per calendar month but there are 56 properties on the market at less than £250 pcm and 570 in the £250 to £500 pcm bracket. There are 77 rooms available with a median rent of £332 pcm, 156 flats with a median figure of £436 pcm and 516 houses at £465 pcm.
Last week's announcement comes as new analysis of the private rental sector shows that student accommodation produces the best returns for investor landlords.
The influential report by Countrywide Residential Lettings says that although monthly rents increased by two per cent last year, the average buy-to-let yield for a landlord is 6.1 per cent gross, actually down a fraction on 2012. In contrast student accommodation is higher than this figure with sustainable and assured yields of between seven to nine per cent net.
Peter McDermott, director of UK-based Go Global Investments, said: "These latest figures show that despite 'Generation Rent', where the number of people renting from a landlord has doubled to 8.5 million in 15 years, gross rental yields are sticking around the six per cent mark.
"Once you factor in void periods, tax implications, maintenance costs and chasing unpaid rent, the financial appeal of being a buy-to-let landlord loses some of its gloss. This is why serious property investors are coming to us to discuss student housing. An investment in student housing generates far fewer headaches than your average buy-to-let, largely because the entire process is hands-off.
"The professional management company finds the tenants, maintains the building and uses economies of scale to help drive down running costs."