We have done a large amount of research in the effects of the reality of our exit from the EU. According to all sources it would appear that the one area that is a safe haven through these troubled times is education as all party policies on University education will remain the same.
Our business model ultimately relies on the gross yield return being greater than anything else on offer within the property market. This will not be affected by the UK’s “go it alone” stance. Ultimately what our investor buys is not only a property, which gives bricks and motar security, but also the rental return which is virtually guaranteed due to the shortfall in student housing in the Salford area. The exit from the EU can only effect this if changes were brought about to discourage overseas and EU students from entering the UK to study. Traditionally this country has always encouraged overseas students, this goes back many years before the common market was established and there would be no logical reason for this to change. Overseas students are attracted to UK education due to the standard of teaching and facilities coupled with the lifestyle they can enjoy whilst studying in the UK. There are also no government benefits offered to the students apart from the means tested support for UK domiciled students only.
Salford University currently has 16% international students, of this only 5% are EU nationals. It is highly unlikely that any government would look to discourage the foreign students intake due to extra income derived from the higher fees charged to international students which helps to meet the budgets for all Universities around the country. If anything the short term lowering of the value of sterling could encourage more international students to study in the UK. Universities have already been granted the ability to charge full fees to all students as opposed to the previoulsy subsidised fees and international students usually pay up to 50% more per year. There does not seem to be to be an argument for any drop in student requirement as an effect of the events regarding the EU exit also bearing in mind that the EU students account for below 1000 of the already oversubscribed Salford University intake it would have no impact on the investment.
Locally we believe that the market will see a steadying effect on house prices which can only be a good thing for our investors and of course any overseas currency investment will in the short term go much further. The announcement that the bank of England is looking to hold, if not reduce the bank base rate to stabilise the UK economy should allay any fear of mortgage rate increases. On the whole we see no negative impacts on this area of business and it will continue to be a strong investment yielding in excess of 14% annually without the risk attached to other UK investment areas.
Whatever the effects on the country as a whole this sector of the market can look forward to continuing positive increases and high yield rental returns on investment.