Categories: buy to let mortgages | hmo

As the UK markets closed the book on 2023, property investors look ahead for opportunities in 2024. Lender Together predicts a 50 per cent increase in buy to let lending over the next 5 years, and identifies the most compelling investments, with student let HMOs out in front.

Landlords and developers shared their views in the report, with potential trends for ground-up builds and rentals becoming apparent.

Surveyed opinion of property investors

The report found that property investors were most interested in expanding into student housing for 2024, believing it offers the most opportunity.

The next most favoured property investment option was in housing developments, with 21 per cent of those surveyed preferring this route.

Luxury residential properties were favoured by 19 per cent of property investors surveyed, which implies that ground-up housing projects of various types are seen as strong opportunities.

Why are student lets so popular?

As the number of people attending university continues to grow, the cities that host them are seeing a continued surge in demand for housing.

Since student lets are most often houses of multiple occupation (HMOs), landlords can benefit from the higher yields, as well as the reduced vacancy risk associated with providing sought-after student housing.

Elliot Vure, Director of Corporate Sales at Together, said:

The fact that property investors are most positive about the outlook for student housing no doubt reflects supply shortages driven by record student numbers, which has created severe shortages of accommodation in some locations, putting upward pressure on rents.

These economic factors certainly put the student let market in a good position, and with the generally higher yields, property investors going down this route may have the wind in their sails.

Another avenue more experienced, commercial investors may look into is student let development. With the Together report also estimating a 32 per cent increase in commercial lending over the next four years, we may see more property investors enter the student let market via development.

Group channel development director at Together, Chris Baguley, said about the report:

Whether its student housing, housing/residential development or repurposing retail and other larger sites, the next few years are going to provide significant growth for the UK commercial property market.

The optimism of the sector, combined with the economic recovery, mean those investors that are well poised with the right finance support will ultimately be in the best position to capitalise on these opportunities.

Commercial Trust will go the extra mile

As the market appears to be optimistic for 2024, with the Base Rate stabilising, student lets seem to have taken front and centre in the minds of some property investors.

If you intend to invest in the student let market, or any other buy to let or commercial premises, seek professional, honest, and transparent mortgage advice by contacting the Commercial Trust team.