Rates expected to fall
The news that the Bank of England’s chief economist voted for a drop in the base rate during the June meeting of the monetary policy committee (MPC) is seen as evidence that this rate-setting arm of the Bank will pave the way for cheaper borrowing next month.
Charles Bean, along with fellow committee member Marian Bell, were the first to vote for a lower base rate in two years; indeed, minutes show that at the May meeting the talk was of raising interest rates. The sudden trend towards an easing of the base rate from the present figure of 4.75 per cent is thought to have been sparked by weak growth figures.
Parents advised to invest in student digs
With a 10%+ annual rise in student rents in the last 3 years, parents should be investing in more than just text books.
As this university year draws to a close, the next generation of students and their parents should consider investing in digs of their own, says Assetz, a leading UK property investment specialist.
With 1.3 million students in the UK at over 80 universities there is always going to be a high demand for student accommodation, leading to rent rises in university towns which easily outstrip national averages. The currently average weekly rent for students now stands in excess of £60– a 10%+ increase since the 2001/02 university year – stretching the pockets of students and parents even further.
But by purchasing purpose built student accommodation or converting existing housing stock, parents can not only reduce the burden of debt for their children – predicted to be £17,561 on average in 2006 – but also invest in their own future, enjoying a healthy rental income long after their child has left university.
Stuart Law, Managing Director of Assetz comments: ‘University towns have enjoyed big rent increases over the past five years, and with Government incentives to boost student numbers to 50% of all 18 – 30’s by 2010, this growth rate looks set to continue. What’s more, students now expect to pay rent for a full year, despite the fact that the academic year is only about nine months long.
‘Students are becoming more demanding these days, with broadband internet access generally being viewed as essential. However we all remember The Young Ones! Investors should be sensible about the quality of fixtures and fittings – hard wearing and inexpensive are definitely best and we are definitely seeing evidence of better quality property being treated with more care, perhaps with parental guarantees being more commonly needed nowadays.’