Student Accommodation is the Ideal Investment in the Current Economy

With the UK set for political and economic uncertainty over the next few years, some commentators have predicted a period of stagnation for the property sector.

Although this remains to be seen and the market has held up well so far, one area that won’t be affected is student accommodation. This is because student investment is countercyclical in nature and less likely to be affected by the overall economy.

Students will always need somewhere to live, and if you can find a property in a favourable location, demand will hold up year-on-year. At Aspen Woolf, we offer a number of student properties for this exact reason.

Outstanding Performance

Student accommodation is one area of the UK property market that won't be hit by political uncertainty

Throughout the current decade, student accommodation has outperformed traditional assets in the property sector. Although recent external pressures on buy-to-let may partially explain this, the main reason is due to the strong demand for purpose-built flats in prime student areas.

Traditionally, first year students have had to rely on university-sponsored halls when they enrol – these are usually older buildings with limited space and basic amenities. Now, it seems undergraduates prefer modernised, purpose-built flats when given the option.

A recent report by Knight Frank backed this up. It showed students are prepared to pay increased rents if the facilities impress them, and so with many new developments containing gyms, games rooms and individual car parking, finding tenants should be of little worry.

At a time of political uncertainy, UK student accommodation remains a safe investment.

Even though many are being constructed in areas close to campus buildings, transport links and shops, there’s still a significant structural undersupply. It is here that individual investors can take advantage.

Yields are consistently high, helped by low-entry prices onto the market, with impressive occupancy rates. This isn’t a recent trend either, it has remained a resilient investment sector for many years now with no indication of slowing down.

In addition, rents are usually guaranteed by a parent and paid upfront. For investors, this provides great peace of mind knowing you’re assured both demand and rental income at the start of each term.

Positive Forecasts

The UK student population is 2 million and they need somewhere to live.

Although the UK student population is roughly 2 million, there’s only enough private-sector accommodation to house a quarter of them. And despite increased university fees, applications don’t seem to be slowing down. It seems the student sector will remain a robust asset class for many years to come.

These positive forecasts are being recognised by wealthy foreign investors. Over 70% of new purchases are from private equity and high net-worth overseas buyers. Even if you can’t compete with this financial clout, as a private investor it pays to recognise their buying behaviour.

According to Knight Frank, the purpose-built student market is estimated to be worth around £46 billion, with a further £5 billion to be added in new developments this year. This shows that, despite the economic uncertainty around at the moment, one sector unaffected is student property.

At Aspen Woolf, we’ve recognised this trend and have sourced various student flats from hotspots across the UK. We’ll have management companies in place for the investment on your behalf, meaning all you need do is sit back and enjoy your assured rental yields of between 6-10%.

 

Take a look at our current student property investment offers today.

If you’re interested in investing in student accommodation, you may want to take a look at the Five Best Student Towns to Invest In.

What Could the Election Results Mean for Property Investment?

A hopeful period of strength and stability didn’t turn out as planned for Theresa May. The snap election has muddied the waters, meaning some property investors may remain a tad more cautious until things settle down.

However, if speculators believe this time of political uncertainty will negatively affect the property market, one glance at the sector post-Brexit should be of comfort. In the year since the Referendum, the average property price has risen by 5.6%.

Likewise, although the Conservatives didn’t get the extended majority they were looking for, they still have mandate to govern effectively and will be able to guide the country through the EU negotiations.

Therefore, property speculators shouldn’t worry too much about the seemingly ambiguous future of UK politics. The law of supply and demand will remain, especially in the consistent rental and student sectors which are more immune to outside influence.

The UK general election led to a lot of political uncertainty.

Image credit: Tiocfaidh ár lá 1916 via Flickr

Expert Views

Many estate agents inside the industry have experienced election fallout before, as well as the 2008 economic crash and last year’s Referendum. Of course, any uncertainty is not welcomed by investors, but because the UK has a chronic housing shortage problem, the demand will always be there.

Sales director at Seven Capital, Andy Foote, echoed these sentiments in the wake of the election result:

“While the London market may be more sensitive to a change in central government, for the short term, growth markets around the country will remain robust and resilient, delivering capital growth for investors,”

“Despite the change in government, the imbalance of supply and demand in the UK property market still persists.”

Housing Minister

Alok Sharma is the new UK Housing Minister.

Image credit: Foreign and Commonwealth Office via Flickr

Adam Challis, the head of residential research at investment management company JLL, has noted that the loss of Gavin Barwell as housing minister will have mixed results. Although some may believe this will create more ambiguity, if the new minister, Alok Sharma, can continue government house building pledges then confidence will return.

Challis says:

“It will be crucial that the new champions of housing market policy in government can reaffirm commitments to the current policy direction rather than to create further disruption or uncertainty,”

“It’s important the policy direction as set out in the white paper on building more homes across the range of tenures will be upheld.”

International Investment

Brexit and the election both saw a drop in the pound. This has mixed results for the economy, where one positive is a rise in foreign spending. International investors will be attracted to the UK in increasing numbers due to the more favourable exchange rate.

This has been evident within the student market in particular. Over 70% of investment in the purpose-built student sector was from overseas buyers last year. The spending behaviour of accomplished and wealthy foreign buyers is a good indication of where growth will occur.

No Real Impact

Just as Brexit didn't have much impact on the UK property market, the election likely won't either.

Image credit: Paul Townsend via Flickr

Nationwide’s chief economist Robert Gardner has maintained that the results of the snap election won’t have too much impact on people’s buying and selling behaviour. Broader economic effects are the main factor, something proven by previous election trends.

As house prices remain out of reach of many traditional first-time buyers, the rental sector is expected to grow in demand as well as rental income. A typical tenant won’t really have the state of UK politics in mind when considering a move, meaning the election isn’t likely to affect the overall property market too much either way.

 

If you’d like further evidence that the property market is still healthy despite current politics, then you might be interested that Demand for Rented Homes is on the Up as Renting is Now Cheaper Than Buying.

Buying A New-Build Property Could Pay in the Long Run

A study by the Home Builders Federation (HBF) has found the cost of upgrading an older property to the same standard of a new-build could be as much as £50,000! Therefore, on top of the initial property purchase, the overall cost may exceed what you’d pay for a new-build in itself.

With this in mind, investors should consider purchasing a new-build outright, especially if the location is desirable and there’s potential for long term capital gains.

Renovation Costs

Renovating an old property for investment can cost thousands of pounds.

Image credit: Nolan Issac via Unsplash

The Home Builders Federation survey looked at refurbishment work that is often required when people move into a new home. Estimates of these potential costs are listed below, although some prices may of course differ depending on the size of the property:

  • Fitted kitchen – £7,900
  • House re-wiring – £8,850
  • New bathroom – £3,800
  • New central heating system – £6,185
  • Roofing – £4,000
  • Doors and windows – £4,900
  • Guttering and insulation – £1,000
  • Utility appliances and electrical equipment – £1,000

If looking to refurbish, one should really take these potential costs into consideration. If they begin to add up significantly, then it’ll make more financial sense to invest in a new-build. Add to this the energy savings you’re also likely to make. Plus the added bonus of having a new-build warranty, which is usually set at 10 years.

Energy Savings

A new-build property will have the latest in energy efficiency and standards.

Image credit: Matthew Hamilton via Unsplash

Buyers are often drawn to new-build homes because of their increased energy efficiency. Compared with Victorian-style properties, they could be up to 65% more effective in preserving heat due to fitted airtight doors, insulated roofs and double-glazing.

The HBF study shows that 94% of homes built in 2016/2017 can boast an A-C energy efficiency rating –  this is just a quarter in second-hand properties. New-build homeowners will therefore save hundreds, and sometimes thousands, of pounds in utility bills alone each year.

New-Build Advantages

New-build properties offer investors a low cost, modern opportunity.

Image credit: Echo Grid via Unsplash

Some older buildings in the UK may simply not meet the standards required for 21st century living. Remodelling them completely may take up too much time and money for it to be considered financially viable. Usually something done out of a labour of love rather than investment purposes.

On the other hand, new-builds are always constructed to modern standards and have to pass multiple council planning, build, and health and safety requirements. They’ll be equipped with energy-efficient boilers and vacuum insulation panels, not just saving you money on bills, but also meaning replacements won’t be needed any time soon.

You’re also likely to experience long-term capital appreciation as new-builds are often hand picked in areas with high social and economic growth potential.Some buyers may not be aware that new-builds are zero rated from VAT. As the buyer, these savings will be passed onto you, helping reduce your overall costs. As briefly mentioned before, fittings in a new property are covered by a 10-year NHBC warranty protection on structural defects. So if anything does go wrong, you won’t have to worry about footing the bill.

Deciding between a large-scale renovation or a new-build property depends on the property itself, as well as your personal circumstances and goals. However, as refurbishment can cost as much as £50,000 as noted in the Home Builders Federation study, it would make more financial sense to plump for a new-build instead.

 

If you’re looking for ideas on where you should buy your investment property, take a look at The UK’s Top Buy-To-Let Hotspots in 2017 Revealed!

For more advice and information on where you can invest in property, get in touch for a chat.

Rents in England Increased Year-on-Year Official Statistics Show

The latest figures from the Office of National Statistics (ONS) show that rents in England grew by 2% in the year to April 2017.

This correlates with an overall rise from January 2011 where rental prices across the whole of the UK have increased by an impressive 14.6%!

Despite additional pressures on the buy-to-let sector in recent years, investors should be buoyed by these rental statistics. This is especially the case if you can obtain properties in buy-to-let hotspots around the country – something we have been quick to recognise here at Aspen Woolf.

Why are Rents Increasing?

The latest figures from the Office of National Statistics (ONS) show that rents in England grew by 2% in the year to April 2017.

Image credit: Christine und Hagen Graf via Flickr

Rents have consistently risen because traditional first-time buyers cannot afford to purchase their own home. Combine this with a chronic lack of housing and you have millions of people increasingly reliant on the private rental sector, and not just for the short-term either.

These findings are backed up by the latest English Housing Survey. It shows the private rental sector has doubled in size since 2004, with almost half of those aged between 25 and 34 paying a landlord for their accommodation. Around a decade ago, this figure was below a quarter.

What this ultimately means is that monthly rates will increase. Landlords are assured of enquiries as potential tenants have no real alternative, even as rents continue to rise each year.

Landlord’s Perspective

A gradual increase in rents over a few years is more beneficial than doing a sudden increase.

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Looking at things from the landlord’s point of view also helps explain this pattern of growth. Of course, no investor wants to disappoint their tenant by raising prices, but the choice is sometimes taken out of your hands.

If the level of inflation or cost of living rises – as it has done in the UK since 2015 – it makes sense to increase your rental income to cope, especially as other landlords are likely to be doing the same.

As noted, it’s not good practice to burden your tenants with an expensive hike in their rent in one go. A gradual increase over a few years is more beneficial, hence the long-term positive trend across the UK as a whole.

Further Analysis

Aspen Woolf have sourced properties from Plymouth due to these rental increases and positive forecasts.

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Looking further at the ONS report, it illustrates that even by removing excessive London rents from the equation there’s still a 10.5% rise after 2011. The rest of England outpaced both Wales and Scotland comfortably.

The South West performed impressively, with rents up 2.5% from March this year, whilst the North West also saw a rise of 1.4% over the same period. Aspen Woolf have sourced properties from Plymouth and Liverpool due to these rental increases and positive forecasts.

There’s no sign of these trends slowing down either, especially as more and more people are being pushed into the rental sector. According to property agent Savills, rents (+19%) across England are set to rise considerably faster than house prices (+13%) between now and 2021.

 

You can find out more about our investment opportunities in Plymouth and Liverpool over on our UK investment page.

If you would like to know more about these areas, you may be interested in 5 Reasons Why Now is the Time to Invest in Plymouth and Three Reasons Why North Liverpool is a Great Place to Invest.

Student Properties Are a Safe Bet For 2017

Student accommodation blocks are now common sights in university towns and cities across the country. They’ve signified a move away from the traditional, tenement-type student digs, offering a sleek and secure way of living favoured by modern students.

Shrewd investors have been quick to spot their potential in recent years. They provide an attractive and often low-cost route onto the property ladder, with guaranteed enquiries year on year. Students will always need somewhere to live, particularly in areas close to their campus or local amenities.

In 2017, this demand will only grow as student numbers rise. Over 408,000 are currently on undergraduate courses, complemented by over 90,000 postgrads – an increase of 22 per cent from last year.

 

Purpose-Built Student Accommodation

PBSA has taken over from traditional student digs in popularity.

Image credit: Elliott Brown via Flickr

The number of students living in private sector purpose-built student accommodation (PBSA) has increased sharply in recent years, making it one of the only property subdivisions to deliver positive rental growth every year since 2007.

Undergrads are increasingly looking towards more luxury accommodation in the modern era, preferring en-suite bedrooms, spacious common rooms and exclusive high speed Wi-Fi connection. Some developments even include games rooms and multi-gym facilities.

The market alone comprises assets worth over £40 billion, with the potential to rise even further over the next decade or so. Average rents have also risen in this time, generating around £150 per week.

 

Managed Lets

Using a letting management agent means you don't have to deal with overwhelming demand from students.

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By placing the purchase in the hands of a professional lettings agent, all the usual hard work and hassle of managing the property is taken care of. For the student sector in particular, this knowhow is especially valuable as the turnover of tenants is relatively high.

For example, as a private investor, you may not be able to deal with a flood of enquiries towards the start of term time. Aspen Woolf will take care of this on your behalf, answering questions from prospective tenants and vetting them in the correct manner.

Students also trust this approach more, knowing they won’t be left stranded with an unreliable or uncontactable landlord if something goes wrong. Any maintenance issues will be dealt with by us, along with regular inspections and inventory stock-takes.

 

Location

One of the student property hotspots in the UK is Liverpool.

Image credit: Vita Student via Flickr

At Aspen Woolf, we only offer properties from the UK’s student hotspot’s such as Manchester, Huddersfield, Liverpool, Edinburgh and Plymouth. This assures your investment won’t be wasted as tenant demand is guaranteed every year.

We also look for universities with a high percentage of international students. This is because they’re often drawn to the PBSA due to its secure and more luxurious nature. Liverpool and Edinburgh Universities, for example, boast around a 30 per cent foreign student intake.

Student property remains a safe bet in 2017, especially purpose-built student accommodation managed by a professional estate agent. You’re getting a hassle-free and relatively low-risk way onto the property ladder, with typical yields of 7% – 10% with no signs of slowing down.

You can take a look at our student accommodation opportunities here.

If you’d like to talk through potential investments or have any questions, get in touch.

8 Reasons Why Bristol is One of the Best Places to Live in the UK

Bristol has been named as the best place to live in Britain, according to a 2017 guide by the Sunday Times. The annual list considers such factors as crime rate, school performance and house prices, with Bristol seeing off stiff competition to take this year’s prize.

Buy-to-let investors looking at Bristol property should hereby be confident that demand for rental homes is strong. A high-quality of life creates jobs, increases commerce and boosts the local economy, meaning you’ll attract tenants who’re willing to stay in the area long-term.

We’ve put together eight reasons why Bristol topped the Sunday Times poll to become the best place to live in the UK.

1. Quality of Life

Bristol has something for everyone, from idyllic landscapes to a host of trendy bars and restaurants. In recent years, this has been supplemented by low unemployment, excellent public services and falling crime rates.

Fantastic views are only a step away from trendy bars in Bristol.

Image credit: Harshil Shah via Flickr

2. Local Economy

Continued investment in Bristol shows confidence remains in the area. The local economy grew by 2.4% in 2016 to be worth £13.6 billion, with a further increase of 15.7% expected by 2026. One example comes with the Bristol Temple Quarter development, creating nearly 20,000 jobs and adding a further £100m a year to the city’s already booming economy.

3. Jobs

The Sunday Times poll found that Bristol offers a “glamorous, creative, hi-tech and professional” variety of jobs, with an above average UK wage of £23,000 per annum. Graduates are increasingly likely to find work in the region and then rely on the rental sector for somewhere to live.

4. Universities

Bristol comprises two major universities, the University of Bristol and the University of the West of England, as well as a host of colleges. This creates fantastic demand for accommodation, especially in areas near to university buildings, bars and local amenities.

University of Bristol buildings are scattered throughout the city.

Image credit: Andrea Vail via Flickr

5. Location

Bristol was praised for being “handily placed for seaside and scenery” but “hardly cut off at the same time”. You’re only a short drive away from gorgeous beaches and holiday resorts, whilst journey times to London, Cardiff, Plymouth and Birmingham can all be made in under two hours via train.

6. Transport

As noted, Bristol isn’t cut off from the rest of the UK despite its ‘independent’ attitude. The M32 runs directly into the centre, with the M4 and M5 close by as well. Buses serve the city centre well, with an impressive number of urban cycle routes also.

Bristol is surrounded by motorways, had a good bus network, excellent cycle networks and two major train stations.

Image credit: Hugh Llewelyn via Flickr

7. Culture

There are plenty of attractions in the city, notably Bristol Zoo, Brunel’s SS Great Britain and the Clifton Suspension Bridge, along with a host of parks, museums, religious sites and activity centres. Looking for somewhere to eat? Bristol can compete with any city in the UK for its cuisine options, as noted on the Visit Bristol website.

8. Property Hotspot

With a steady supply of students and young professionals, the buy-to-let sector in Bristol is booming. As the city continues to attract investment and provide a high-quality of life, the likelihood of people remaining is strong. The property market as a whole is forecast to perform well in 2017 and is currently outpacing London with a 9.2% annual price growth.

 

Bristol isn’t the only city in the South West that is hot for property investors right now. Check out these 5 Reasons Why Now is the Time to Invest in Plymouth.

How to Protect Your Property Portfolio in 2017

A successful property portfolio requires ongoing investment and long-term maintenance to sustain performance. Without protective measures in place, its market value and rental returns will be threatened.

Be it for just one or a string of properties, there are certain ways to ensure your portfolio sustains long-term capital growth and provides healthy yields along the way. Here are some ways to protect your investment through 2017.

Landlord Insurance

Landlord and Income Protection insurance are both important to investors.

Landlord insurance is specifically manufactured to suit the buy-to-let market. However, specialised cover is needed depending on the type of property and tenants in question.

Basic landlord insurance typically includes the same type of protection as your usual house insurance, covering against fire and flooding, for example. However, additional extras will be required to safeguard against such actions as unpaid rent, malicious damage, loss of income and legal disputes.

For furnished properties, contents insurance should be taken out to cover such items as kitchen appliances, furniture, utilities and carpets, etc.

Income Protection Insurance

Many investors rely on personal income to maintain mortgage payments, especially if they’re self-employed. However, should you lose work through no fault of your own – due to illness, for example – then income protection provides a regular monthly salary for a specified period in replacement of the expected wage.

Know your Interest Rates

Do your research and keep an eye on interest rates as a landlord.

For buy-to-let mortgages, you have the option to lock in your interest rate or use a variable rate over a set period of time. Whilst the fixed rate won’t budge over the repayment period, the variable rate tends to follow the Bank of England’s base rate and so can be changed at any time. Knowing which option to choose depends on the current market conditions.

For 2017, it appears there is pressure from Governor of the Bank of England Mark Carney to raise interest rates, although many lenders haven’t succumbed as yet. At time of writing, there are still ultra-low rates available and many people are taking long-term, 10 year fixed deals due to current uncertainty post-Brexit.

Tax Planning

Changes are coming to taxes in April 2017 so landlords should research their options and plan accordingly.

Being phased in from April 2017, tax relief on residential properties will be restricted to the basic rate of income tax. This will push higher rate payers into the 20% relief bracket. To cope with the additional pressures, some buy-to-let landlords have moved their portfolio into limited companies or transferred properties to family members in a lower tax bracket.

Tax repercussions are a complex matter so it’s recommended to use the know-how of a professional accountants or letting agents to protect your property portfolio from tax inefficiency.

Further Advice

Before settling on a purchase, research the expected 2017 property hotspot areas such as Manchester, Edinburgh and Liverpool, which are backed up with vast student numbers and young professionals who move into the rental market.

Other measures are to acquire high-quality home security equipment, such as CCTV cameras and intruder alarms, to deter crime and satisfy insurance requirements. For additional protection, consider how your Will deals with your portfolio.

 

If you’re looking to expand your property portfolio, you may be interested in the UK’s Top 10 Best and Worst Areas to Invest in 2017.

11 Facts about Edinburgh You Might Not Know!

Edinburgh is a beautiful city, steeped in culture and history, and teeming with a range of stunning architecture. But how much about this fascinating place do you know? Here are a few fun facts about Scotland’s capital that you might not know:

UNESCO Edinburgh
1. Meet me in Auld Reekie!
Edinburgh’s nickname is Auld Reekie (Old Smoky). This comes from the time that coal and wood were predominately burnt for heating, filling the air of the city with smoke.

Old Edinburgh Fire Brigade
2. And where there’s smoke, there’s fire!
Edinburgh was the first city in the world to have its own fire service. In 1703, after a series of fires devastated parts of the city, The Edinburgh Act was passed, and a ‘Company for Quenching of Fires’ was formed. This first brigade was made up entirely of volunteer firefighters.

Castle Rock in Edinburgh
3. Castle Rock hides an explosive secret!
The large rock Edinburgh Castle sits upon is actually an extinct volcano! But rest assured, the volcano last erupted over 350 million years ago. The crater of the volcano is named “Arthur’s Throne”.

Edinburgh Castle is home to another famous stone of destiny
4. Edinburgh Castle is home to another famous stone.
The Stone of Destiny, which is still used during the crowning ceremonies of English monarchs, is kept in the castle. After being captured by Edward 1st in 1296, it was finally returned to Scotland in 1996. It was last used in the coronation of Queen Elizabeth II, when it formed part of the coronation chair.

Sherlock Holmes
5. From famous stones to famous detectives.
Writer Sir Arthur Conan Doyle, an Edinburgh native, apparently based his most famous creation, fictional detective Sherlock Holmes, on the then President of the Royal College of Surgeons of Edinburgh, Professor Joseph Bell.

Edinburgh UNESCO City of Literature
6. A literal City of Literature.
Conan Doyle isn’t the only famous literary figure to emanate from Edinburgh. The likes of Robert Louis Stevenson, Muriel Spark, Irvine Welsh and Sir Walter Scott were also born in the city. In fact, thanks to its long heritage of literary prestige, Edinburgh was the first city to be named UNESCO City of Literature. And there’s the famous local legend of J.K Rowling writing the first Harry Potter book in an Edinburgh café!

Other famous literary names from Edinburgh
7. Other famous names sure to ring a bell.
And it’s not just famous writers that Edinburgh has given us. Sir Sean Connery, Ronnie Corbett and Alexander Graham Bell, inventor of the telephone, all come from the city.

Edinburgh Zoo
8. Edinburgh’s most exotic residents.
Edinburgh Zoo – the city’s second most popular tourist attraction – is the only zoo in the UK that is home to koalas and pandas. Koala Territory, opened in 2005, currently houses 3 koalas, while Yáng Guāng and Tián Tián the giant pandas were loaned to the zoo by China in 2011.

Edinburgh Fringe Festival
9. The city attracts a lot of visitors too!
The population of the city doubles during August, aka festival season! From 500,000 to over a million. The Fringe Festival is just one element of Edinburgh’s tourism trade, and industry that brings over 15 million visitors to the Scottish capital every year.

A Taste of the High Life, Scottish Whiskey
10. A Taste of the High Life.
This northern city is also famous another export: Whiskey. Scotch whiskey has attained such a high reputation that forty bottles are shipped abroad every second! And Edinburgh is the biggest contributor to this £3billion industry, with a variety of distilleries and specialist bars scattered across the city – including a fabled distillery at the foot of Edinburgh Castle: The Scotch Whisky Experience.

Scotland's Unicorn and Flag
11. A Touch of Magic.
While you ought to know that Edinburgh is the capital of Scotland, you may not know that Scotland’s national animal is… The unicorn! How fun is that?! Although for a city that inspired Harry Potter, it’s perhaps not so surprising.

There are so many fun sides of Edinburgh to be discovered, it’s no wonder that people flock to visit, work and invest in the city.

If you want to know more about this spectacular city and why you should consider investing in property there, take a look at Why Invest in Edinburgh.

Take Advantage of the Currency Rates

With fluctuating currencies across world markets, investors are always looking for ways to take advantage of favourable exchange rates. With the pound falling in value after the Brexit result, yet expected to rise again in time, the notion of trading one currency for another is fresh in the public conscience.

Here is a look at how to use this in your favour if looking to get more value for your money.

 

Exchange Rates

 

Exchange rates can change quickly.

Image credit: Ken Teegardin via Flickr

Exchange rates are the value of one currency compared to another and they will vary mainly due to economic performance. Higher inflation rates in one country will often mean lower exchange rates when converting this currency into another.

For example, if UK inflation rises then this means that UK-produced goods will increase in price faster than elsewhere in the world. Demand from foreign buyers for the UK market will decline and sterling will decrease in value.

Also, higher interest rates in a country will appeal to depositors looking to gain more value for their savings. If the Chancellor raises interest rates in the UK, this should also see an increased demand for the pound.

Rates can change relatively quickly, especially after significant events such as the EU Referendum or a budget announcement. Keep an eye out for upcoming international events such as an important general election, as well as signs of changing inflation and interest rates, which may lead to attractive currency exchange deals.

 

Exchanging Currency

 

There are many reasons why people exchange currency.

Image credit: Keith Williamson via Flickr

There are numerous reasons why people exchange currency, although the most popular reason is for an upcoming holiday. Doing so is relatively easy in the modern age, with plenty of high street and online outlets ready to swap your pounds for an array of foreign currency.

Currency exchange outlets will charge a commission fee for converting your cash so it pays to shop around for the best deal. However, remember that some ‘commission-free’ deals will only mean their exchange rate isn’t very favourable. There’s also pre-paid travel cards that mean you can withdraw money abroad without incurring additional bank fees.

Many traders use the Forex platform to speculate on currency, with trillions of pounds exchanged every day. Unlike physical stores, Forex trading occurs 24-hours a day through a global network of banks, investors and businesses. FX traders try and anticipate inflation or changing inflation rates before they make a purchase or sale of currency, usually for short-term gain.

 

Get More for Your Money

 

Investors can take advantage of exchange rates.

Image credit: Philip Taylor via Flickr

Shrewd investors are always on the lookout for opportunities to make their money stretch further. One current example is the favourable exchange rate between the British pound and UAE dirham, appealing most to wealthy foreign property investors looking at the UK market.

With the pound decreasing in value, many foreign investors will be getting more for their money with the added incentive of probable long-term gains on their investment. In other words, now is looking like the time to use the dirham to spend in the UK due to the favourable currency exchange. Currently because of the exchange rates UK property is about 10 per cent cheaper today than it was before the EU Referendum. A great time to save thousands on an investment property.

Furthermore, because UAE currency is pegged to the US dollar, earnings have become worth more due to the strong performance of the American economy. Links between UAE investors and the UK are already very healthy, with new trade deals expected to reach £25 billion between the two countries by 2020.

If you found this article interesting and would like to know more, check out What Does the Cut in UK Interest Rates Mean for Investors?

Knight Frank Predict Rise in Student Investment

Anyone who has picked up a newspaper, logged in to an online media website or turned on the television of late, would be forgiven for thinking that the property market is in utter turmoil and ready to implode at any minute. Brexit fears, mayoral elections and general uncertainty has led to journalists up and down the country doing what they do best – scaremongering.

However, when you consult the actual experts and speak to those who are really involved in property investment, the response that you receive can often be quite different. Take the new report from Knight Frank as a prime example. The results found in their examination of the commercial property industry show that the forecast for the future of British property investing is anything but downbeat. In fact, for asset classes such as student property, the future looks decidedly rosy.

Is the student property market in trouble?

Image credit: rawpixel via 123RF

Specialist property sectors set to increase

While it may be true that some areas of the property market are not currently performing as well as they have done in the past, being a canny investor is all about looking forward, not back. Transferring from one investment vehicle to another and pivoting when needs must is key to maintaining a buoyant portfolio, and the specialist property sector looks set to continue to offer investors a viable alternative to other, less secure opportunities.

The report states that the specialist sectors investigated – healthcare, student property, automotive and hotels – will see a 10 per cent increase in total investment this year when compared to 2015. This will take the specialist sector market to an incredible £14.3 billion by the end of the year.

Overseas investment will continue to be noteworthy, with money expected to come from Asia Pacific investors and North American funds amongst others. This proves the point that the momentum in this market is growing and that professional investors are viewing the UK’s specialist property market as a good option to bring stability to their overall investment portfolios.

Specialist property investments could help to stabilise the market

Image credit: photodeti via 123RF

Student property attracting significant attention

One area of the specialist property market that is gathering pace is the student property market. For quite some time now, student property has outperformed other parts of the British property market, and we are currently seeing more and more investors cottoning on to what is viewed as one of the most secure and balanced investments available.

Both international and institutional investment looks set to rise over the coming months and the amount of student property real estate investment trusts will also increase. Knight Frank also predict that there will be a consolidation of assets and a rental uplift that will hit 3.5 per cent during 2016.

Investment in student property looks set to rise

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Student property also exceeded both its five and 10 year averages in 2015, and the trend looks as though it will carry on as we move ever closer to the second half of 2016. So, for those looking to bring a more defensive asset into their investment portfolio, student property could well be the answer they have been searching for.

Has this inspired you? Then you may also be interested in Everything You Need to Know About Student Investment in the UK.
For more good news, check out Property Investors to Benefit from Tax Relief.