There has been much written recently in the national media about the potential impact of the introduction of higher tuition fees in the wake of the Brown Review of the Higher Education system. Some market analysts and media commentators have claimed that the tuition fee rises which commence this autumn could seriously impact many student buy to let investors, and that doomsday is approaching for many student landlords, with one analyst last year stating that ghost towns could be emerging in some student areas around the country.
However, in reality nobody really knows what will happen and other commentators, such as Ernst & Young, anticipate that the changes will likely have a minimal impact upon student numbers overall. There has even been conjecture that students disposable incomes may actually be higher during their university years, given that repayment of tuition fees will be deferred until the student is earning above £21,000 a year, (compared to £15,000 at the moment).
There is no doubt that investing in student property has generated some tremendous returns for many investors and its popularity has grown so much that it has become a separate asset class in itself, generating attractive rental yields. With the instability of the markets in recent years, and in particular the property sector; investors, both institutional and private, have taken refuge in student property returns.
Following the Governments review of the higher education system in 2010 universities and colleges will now experience sweeping changes to the funding system. Universities can now charge between £6,000 and £9,000 per annum in tuition fees. So can the private buy to let investor expect similar growth and returns or is it the end of a good run for the student property investor?