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UK student apartments in a nutshell: types, trends and investment opportunities

Despite the current economic and political situation in the world, and especially in the market of raw materials, the interest in investing in abroad real estate remains fairly stable and even increasing. One of the most promising options for today investment in overseas property is the acquisition of student accommodation in the UK. It is in steady demand from tenants, it does not require large investments and has good yield.

No law gives the exact definition of what the student real estate is. This term came up from the sellers and developers, and it typically implies a small area housing of varying quality, localised in cities with a high concentration of large institutions; such objects are often located in close proximity to universities or college campuses. And the most common use of student property accounts for the countries with a high level of education – the US, UK, Germany and France. But, perhaps, the first place in this list still belongs to Albion, which is not only one of the biggest markets of education, but also attracts the largest share of foreign students. English education is considered to be very prestigious and gives amazing professional opportunities after graduation.

In 2013, the number of students in the UK increased by 3.5% (compared with the previous year) and amounted to 2,584,027. And according to HESA (Higher Education Statistics Agency), from 2000 to 2012 the number of students in universities and colleges has increased from 1,948,135 to 2,496,6645 people (or about 1.5 million), approximately 435.235 of which were non-UK residents. These figures, of course, attract private investors, especially given the accessibility of this method: a decade earlier it was only available to large funds and banks; now initially you only need £5,000 to join the project, plus cover the legal expenses on conveyance solicitors.

In the UK student property can be divided into two types. The first one represents small apartments or studios in the ordinary apartment buildings, located within walking distance from the university, as well as multi-room apartments and houses. Rather than providing these objects for rent by families of several individuals, they are divided into rooms and leased to students. The second type of student housing represents special facilities: this may be new projects near the university and rebuilt buildings that were previously used for another purpose. In practice, you can find very decent student apartments, reconstructed from schools, hospices, and even old mills.

Specially built complexes for students are called the Purpose Built Student Housing (PBSH). They typically represent modern gated complexes with residential premises and associated infrastructure: sport and fitness centers, clubs, entertainment, shared lounges, kitchens, dining rooms, laundries and classrooms equipped with everything necessary for effective studying. The residential units of such facilities have a small area largely ranging from 14 to 20 m2, and studio areas larger than 18 m2. The rooms usually have furniture, as well as a private shower, toilet and a small kitchen area. In fact, we are talking about nothing, but very comfortable, luxury class dormitory.

What You Should Know About UK Real Estate in 500 words

The most expensive real estate market in the world is located in the UK, more precisely – in London. This is where everything is sold and rented at a lightning speed. Taking into account a relatively small territory, the rapidly growing population and the high international demand for housing, a shortage in real estate opportunities is observed almost permanently.

Despite the above, the government is trying to maintain reasonable regulations and approaches, it even leaves room for the green park areas and is engaged in the reconstruction of industrial areas, theaters and galleries. Thus, officials are trying to preserve the historical past of London. Interestingly, most people live in small country houses, rather than in high-rise buildings. And if someone says that to buy an apartment or house in London is very simple, it is not true.

The features of the property market

The real estate market in the UK controls the land legislation, which has not changed since the time of William the Conqueror. In this regard, the purchase of real estate regulations are quite different from the international standards. It is important to know that the land of England is the property of Her Majesty the Queen, and people are only entitled to use the buildings that are located there temporarily (although for long periods of time).

Consequently, ‘property ownership’ is divided into several types. Freehold is the type allowing its owners to competently manage the property and do with it whatever he or she deems necessary in consultation with the relevant authority. This type of property is best suited under the criteria of most countries. It has been the most common type of acquired real estate in England for a long time, but now its share is shifting to the lower side. Shared ownership represents a subspecies of the previous type of ownership. It implies the existence of a two or more equal owners. When buying a house in the UK within the ‘long-term lease agreement’, this property is referred to as ‘leasehold’. This type of ownership implies the temporary use of the apartment or house. The contract must be clearly stated who is the owner of a temporary and has to pay the rent for the land. According to conveyance solicitors report published at solicitors.guru, one of the largest legal platforms where you can find solicitors in Harrogate (York and all over North Yorkshire), this type is recently gaining momentum due to its affordability against the background of freehold.  There are contracts, for example, implying the ownership of no physical objects (so you don’t own walls or ceiling). If the tenant wants to make alterations to the premises, he or she must get a special permission to do so. The contract can be signed for the period from 23 to 1000 years. The buildings, which are acquired for more than 90 years, are called virtual freehold, because their value is equal to the value of freehold houses. Since the lease expires, the yearly property falls in price. When leasehold expires, then comes the appraiser and prolongs its life. Under the terms of long lease the tenant has the opportunity to buy real estate in a freehold.