Investors commit to UK student market

Indeed, student numbers have been rising year-on-year over the last five years, increasing by 4% last year alone according to the CBRE report with the growth in university students putting considerable pressure on the existing student housing stock across the country.

The report highlights that there are around five full-time students for every bed-space available in Brighton and Hove University for example followed by a mere seven spaces in Dundee and nine in Glasgow.

Concerns over the impact on demand due to the forthcoming £9000 a year student tuition fees have been allayed as students will not need to pay any of charges up-front, a key factor in upholding existing levels of housing demand and ensuring upward pressure on rents. In fact, it has been suggested that the increased fees will place greater importance on value for money and improved quality with student accommodation playing a significant part in the overall university experience.

Jennet Siebrits, head of Residential Research, CB Richard Ellis said: "Accommodation will play an even more important role in a university’s overall offer as students’ expectations increase with their budgets which will see students demand high quality accommodation, a good service-led approach from operators and ideally, all-inclusive rent. Private developers will be relied upon to plug this gap, given that the universities will have very little capital to do so themselves.

"This should encourage more opportunities for developers to work closely with the institutions going forward, which will also prove helpful in the planning process."

It is expected that demand for student housing will continue to remain resilient overall with the sector predicted to outperform most other property sectors by some margin and with investors and developers continuing to be attracted to the traditional university cities, predominantly those in the Russell Group which represents the 20 leading universities in the UK, there are plenty of investment opportunities to be had.

Alan Forsyth, Director of property investment agency, Property Secrets said: "Students have realised the appeals of modern, purpose-built accommodation available from the private sector and this in turn is pushing up demand.

"Consequently, buy-to-let investors will continue to look towards the private student housing market as a way of ensuring guaranteed returns as well as a diversification of their real estate portfolios."

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One thought on “Investors commit to UK student market

  1. 2012 parent

    are you on a different planet? the class of 2012 (and beyond) are completely rethinking what university is about. about half of all of my kids friends are seriously considering whether a degree will be worth the debt or whether to stay at home and commute to a local uni rather tban incur further debt by paying for accommodation on top of their tuition fees.

    if you are an investor, have a serious conversation with any 17 year old or their parents.

    past performance, as in every other investment class, is no guarantee of future returns.

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