Breaking Property News – 26/07/2023
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Novyy Rooms completes the acquisition of 50-student rooms in Coventry as a part of their Student Housing investment strategy.
Press Release Novyy, a unique fractional ownership platform focusing on the British buy-to-let market, has recently achieved a significant milestone in its investment strategy by acquiring 50 student rooms in Coventry. This strategic decision marks a pivotal moment for Novyy as it ventures into the lucrative student housing sector. Recognizing the immense potential and growing demand in the student housing market, Novyy has strategically diversified its investment portfolio to include this promising sector.
According to the founder and CEO of Novyy, Ashish Saraff, “There has been a significant increase in the demand for student housing in recent years. This surge can be attributed to the rising number of students in the country as well as their growing inclination towards seeking complete university experience, particularly after being indoors during the COVID-19 pandemic”.
“Students are actively seeking alternative housing options off-campus due to growing financial constraints and rising living costs. As a result, there is a surging demand for private rental solutions, such as Houses in Multiple Occupations (HMOs),” he added.
Providing Student Housing in Response to Growing Demand
Novyy announced the completion of acquisition of 50 student rooms in Coventry on July 15, 2023. Novyy, a unique fractional ownership platform focusing on the British buy-to-let market, has recently achieved a significant milestone in its investment strategy by acquiring 50 student rooms in Coventry. This strategic decision marks a pivotal moment for Novyy as it ventures into the lucrative student housing sector. Recognizing the immense potential and growing demand in the student housing market, Novyy has strategically diversified its investment portfolio to include this promising sector.
The acquisition of these 50 rooms in Coventry represents a calculated and tactical move in the company’s investment approach, further solidifying its position as one of the top owner-operators in Coventry. Novyy Rooms’ foray into student accommodation is a testament to its commitment to identifying and capitalizing on emerging investment opportunities. By leveraging its extensive knowledge and experience in the British buy-to-let market, Novyy aims to provide exceptional value to investors seeking lucrative returns from the student housing sector.
Investments in Student Housing are Popular in Coventry
Coventry, renowned for its 2 universities and Jaguar Land Rover, boasts a vibrant community of students and young professionals, making it an attractive destination for investments in student housing. Novyy’s recent acquisition of 50 rooms at this particular location exemplifies their unwavering dedication to fulfilling the housing requirements of students and young professionals. The properties are located in CV1, minutes from Coventry University and with excellent transport links to other parts of the city. They are looking to add another 50 rooms to the portfolio this year and further expand within the region to CV5 to serve students at Warwick University.
Opportunity for professionally run portfolios.
Ashish Saraff further adds, “The evolving regulatory landscape in HMO segment like imposition of Article 4 has opened up a promising opportunity for professionally run portfolios to take over from individual landlords as the latter continued to be under operating pressure due to lack of scale”. Due to evolving regulatory and tax measures, over 300,000 buy-to-let mortgages in the United Kingdom have been settled, resulting in a diminished allure for private landlord investment. The substantial decrease in the number of 5+ bed properties posted for rent during the first quarter of 2023, by 31% compared to pre-pandemic averages, highlights the impact of the pandemic on the housing sector. This decline is attributed to changing housing preferences and economic uncertainties. As the rental market adapts to evolving circumstances and faces a shortage in supply, students are increasingly seeking alternative options. He further mentions that “students prefer staying in small groups with their friends and mates rather than in self-contained flats in tall buidings.”
The influx of foreign students and its effects on the private rental market
According to research, the population of international students pursuing education in the United Kingdom has reached a new milestone, with a remarkable surge of 12.3% compared to the previous academic year (2020–2021). The current count stands at an impressive 605,130 students from overseas.
The private rental industry has also experienced significant advantages as a result of this. International students have the financial means to opt for higher-end accommodations such as Purpose-Built Student Accommodations (PBSAs), which offer a range of luxurious amenities such as conference facilities, fitness centers, state-of-the-art movie rooms, trendy cafes, and vibrant bars. However, there is a vast segment of cost-conscious students who have smaller budgets and seek value for money. Novyy has recognized the current trend and encourages investors to allocate some of their capital to this ever-growing market.
Investing in student housing offers the advantage of attractive rental yields.
According to recent findings, investing in student housing offers a significant advantage in terms of attractive rental returns, with an average yield of around 7%. These returns surpass those obtained from traditional buy-to-let properties, making student housing a highly profitable investment option. HMOs, or Houses in Multiple occupations, offer a unique income-boosting opportunity by allowing landlords to rent out individual rooms while offering shared amenities such as kitchens, living rooms, and toilets.
A new solution addresses the housing shortage for students.
The strategic move to acquire 50 student rooms in Coventry aligns with Novyy’s overarching objective of capitalising on the burgeoning student housing market while addressing the pressing issue of escalating accommodation demands among students. Novyy’s investment approach is poised to thrive in the highly competitive real estate market, as forecasts indicate a potential shortage of 450,000 beds by 2025.
Novyy Introduces a Passive Investment strategy.
Novyy’s passive investment approach is gaining popularity among investors. This strategy enables them to enhance their earnings while alleviating the challenges typically associated with property management. Collaborating with expert investment platforms such as Novyy ensures streamlined tenant management, property maintenance, and rental processes.
Expanding Investment Prospects
Ashish Saraff added, “Novyy Rooms has achieved a significant milestone in its student housing investment venture with its strategic location in the heart of Coventry. In its ongoing commitment to offer advantageous opportunities for individual investors and family offices, the company remains dedicated to facilitating their participation in the thriving student housing market in the United Kingdom“.
Less than One-million completions in 2023 is predicted – a drop of over 20%
‘The following are comments from the final episode of season two of The Home Stretch provided by The Guild of Property professionals.
In the final episode of the second season of The Home Stretch podcast, Iain McKenzie, CEO of The Guild of Property Professionals, is joined by property market analyst and Head of European Housing and Building Materials at the Royal Bank of Canada, Anthony Codling, to discuss what has been unfolding within the market during the second quarter of the year.
In previous episodes Codling had made several predictions regarding what he thought we would see in the property market during 2023, so is the market playing the game and reacting as predicted?
Looking at transactional volumes, Codling predicts that there will be around 960,000 housing transactions by the end of the year, which is down by 20% on the figure seen during 2022. “So far to May there has been 432,000 transactions versus 545,000 transactions during the same period last year, which is down 21%. While there is a lot that can still happen in the second half of the year, as of now the prediction looks fairly accurate,” Codling comments.
He adds that if one looks at mortgage approvals as a lead indicator of housing transactions, from January to May there were 235,000, so much lower than the transaction levels due to aspects such as timing delays, but it also shows just how many cash transactions there were in the market during that period. “In the last five months of 2022, so August to December, there were 280,000, so that not much more that what we have had during the first five month of this year. Based on this, I think it is not too of an ambitious target to stay around the 20% below 2022 target,” says Codling.
According to Codling house prices partly feed into the transactional volume. “If the peak was September last year at just under £294,000, then we are down 2.5%. And bizarrely, house prices have actually gone up this year if you look at the latest data released from Halifax. I think this is testament to how robust the market is. If the market really was as weak as many predicted, house prices would be tumbling but they are not. Even with all the talk there has been of weakness in the market, we are still £47,000 higher on average from where we were during the first lockdown,” he adds.
In response, McKenzie says: “What frustrates me is that consumers are being feed one side of the rhetoric. This is why I say that an agent’s job to help consumers make an informed decision by giving them the correct information. There is a lot of headline grabbing articles that may be scaring people out of the market, when the data and truth of the matter is very different.”
Codling and McKenzie go on to discuss several other aspects around the property market and what the data is telling us, and his predictions for the remainder of the year’.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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