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Types of student accommodation
It’s useful to break student accommodation down into 5 main types:
These are usually former residential houses that have been converted to house three or more tenants, where each is from a different household and share communal kitchen and bathroom facilities (unless all bedrooms are ensuites). HMOs have to have C4 planning consent, are subject to local licensing requirements, and must comply with regulatory standards concerning safety, amenities and room sizes. Flats with three bedrooms or more are also classed as HMOs.
Whether built from the ground up or converted from larger premises, these blocks typically house anything from around 50 to 500+ bedrooms formed of either studios, single ensuite rooms or cluster flats, and often provide a range of lifestyle facilities onsite such as laundry services, gyms, concierge, cleaners etc.
Converted from small office blocks, commercial premises or large period houses etc, these blocks have fewer bedrooms and onsite resources than PBSA, and may also consist of either studios, single ensuite rooms or cluster flats.
These can be repurposed to rent to students, normally without planning permission if they are for two students or less.
These are often sold off plan during the construction of PBSA to fund developer costs and normally come with a rental guarantee period.
Is student property a good investment?
Not all student accommodation is the same but it is possible to talk in general terms about some of the distinctly advantageous features of investing in this asset class:
It’s essential to be clear on how to navigate through the Dos and Don’ts of student accommodation to avoid common pitfalls and generate the very best returns possible.
HMOs – Definition and licencing requirements
HMO stands for House of Multiple Occupation. A property is a HMO if it is rented to at least three individual tenants from more than one household, and who share toilet, bathroom or kitchen facilities.
A household consists of either a single person or members of the same family who live together. It includes people who are married or living together and people in same-sex relationships.
Understanding Article 4
Under current planning regulations, a normal residential dwelling is classed as C3 whereas an HMO is classed as C4.
Up until 2010, ‘Permitted Development Rights’ meant that a house could be converted to an HMO (from C3 to C4) without the need for planning permission.
Since 2010 however, local councils have been given the power to remove permitted development rights through a clause known as Article 4. In other words, councils now have the right to insist that planning permission is granted before a residential house is converted into an HMO.
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“New to the world of HMO investment, I could not have asked for a better team to help me navigate through sourcing, purchasing, refurbishment, renovations and letting. The trio partnership of Accumul8, Renov8 and Loc8me is a dream team. As a remote investor this has taken the stress out of venturing into this market. Always at hand when you need advice, Beth is always prompt and efficient in dealing with matters and getting back to you. Professional, polite and courteous at all times.”
“Dealing with Mike has been a breath of fresh air. Accumul8 know the market inside out, are enthusiastic, honest and have always delivered on promises. It’s never easy being a long way from a property but I am more than happy with those guys involved. They sold one property for exactly what we wanted and has sourced a builder to work on our other one which has produced a letting at a higher price than before, in the space of 3 weeks. I couldn’t be happier or more confident in what is being done on our behalf.”
“Mike Hughes provided outstanding service in the sale of our property in Lincoln. He went way beyond the duties normally expected of an agent and proactively anticipated and dealt with issues that would be raised. Mike has very good contacts with the local authority, which allowed difficulties to be resolved and at every stage he communicated most effectively with everyone. His professionalism is an example to others and I can strongly recommend him to whoever would benefit from his services.”
“I’ve worked with Mike on multiple properties – their service is simply first class. I’m always impressed by their expertise and their proactive approach. I would have no hesitation in recommending them to anyone looking for an invaluable partner in property.”
Founder of Horton’s Estate Agents
“The team at accumul8 and loc8me look after us extremely well. They’ve helped us build and manage a substantial portfolio over the last few years. We’re very grateful to Mike for his commitment to every aspect of every deal that he sources for us and look forward to doing business together for many more years to come.”
“Working with the team at accumul8 helped me expand into three new target cities within a 12 month period and add 120 beds to my student property portfolio. This would have been impossible without their sound advice, ability to source assets at speed, and capacity to undertake and manage two large refurbishment projects. Each acquisition and renovation project came with it’s own challenges which Mike and the team walked me through. As an investment professional myself, I can wholly recommend accumul8 to investors looking for a highly effective and client focussed service.”
“I contacted the team at accumul8 with some general questions surrounding HMO property – I wasn’t sure whether it was the right investment for me. Through their informative communication and proven track record, they gave me the necessary confidence in the student market. By only bringing properties tailored to my investment profile, they clearly listened to my requirements and since initial contact, I have purchased my first HMO through them and am about to complete on a further two.”
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