Photo credit: Tulane Public Relations
Weakness in the Indian economy and currency caused the country to clamp down on the amount allowed to be invested overseas by investors. Since the currency has stabilised and the economic outlook has improved, boosted by the recent election, though, Indian officials have decided to raise the limit on remittances to $125,000 per financial year.
The scheme can now be used for acquisition of immovable property outside India and banks are allowed to remit the funds per financial year, for any permitted current or capital account transaction, or a combination of both.
As a result, demand is rising for student property UK, according to The Mistoria Group.
Indeed, yields in India for residential rental property has been low at around 1 to 2 per cent in recent years, but appreciation is high, between 10 and 30 per cent per annum. Though property prices have corrected, rentals have not improved, says The Mistoria Group, prompting buyers to look overseas at other sectors.
Student property has consistently proven one of the most popular assets on TheMoveChannel.com, thanks to its low entry costs and high yields, driven by consistent demand for accommodation from the university population. Indeed, typical rents are significantly higher than a comparable buy-to-let property in the same city, notes Mistoria, with the average gross cash rental yields for the student property sector in the North West of England reaching 13 per cent for the first three quarters of 2014.
Mish Liyanage, Managing Director of The Mistoria Group explains: “We have experienced an increase in demand from Indian Investors over the last few months, all of whom are looking for investment opportunities in student accommodation. Since 2011, student accommodation has outperformed all other traditional property assets and has been the strongest growing investment property market in the UK.”
Sandeep Singh, an Indian lawyer and a Masters in Real Estate from University of Reading, comments: “The UK is considered a safe market without a lot of hassles for overseas landlords looking for passive income. The UK law does not prohibit international investment from foreign nationals. To add to this, there are no legal hassles regarding title of property and the prices of real estate in Indian cities are very much comparable with prices in UK major cities.
“Since the legislative changes, the UK student market has become highly attractive for Indian investors as it offers high yields, good asset growth and hands off investment.”