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Where to invest in 2016?

Student homes and healthcare properties, as well as hotels, will be at the forefront of a wave of investment set to come into British property this year, a new report from the property consultancy Knight Frank has predicted.

In the past year student accommodation and healthcare property investment totals have benefited from rising student demand and the closure of many public sector care homes respectively, and this looks set to continue, with these two asset classes joined by alternative commercial properties and hotels at the top table.

 £14.3 billion worth of investment in 2016.

 It said that in 2016, the four property types should be able to combine to bring in investment of some £14.3 billion. This would be a full ten per cent higher than they collectively managed to deliver in 2015, Knight Frank said.

But what’s behind this shift towards these four assets in particular? According to Knight Frank, it’s the fact that buyers are now starting to see more niche property types as safer investments that may not offer the highest returns, but do promise a stable and consistent income over a long period.

People are now more prone to look at the long game after seeing how quickly residential property can rise and fall in the aftermath of the recession in 2007. While the peaks can often be high, the troughs are low, and many are, as a result, looking for safer ways to invest their money.

 Will student property still be king in 2016?

It would seem that rising student numbers and a continued lack of high-quality student property will drive the market in 2016.

While investment in the student property sector may decline, rising student numbers will no doubt add to investor confidence. 

What’s more, the latest report from CBRE has shown that average rental prices in the student market increased by 1.94% in 2015. Investors also received an average return of 18.4% in 2015 – when taking yield shift, rising prices and a generally positive outlook of the market into account.