The Boom in Purpose Built Student Accommodation

The Boom in Purpose Built Student Accommodation

Over the past few years, the Purpose-Built Student Accommodation (PBSA) market has seen some exponential growth. With even greater numbers of young people, both from the UK and from across the globe, choosing to study at university in this country, the need for suitable housing has expanded too.

This has led to the student accommodation market becoming one of the UK’s largest emerging sectors within the property investment industry. In fact data from property agent Knight Frank has shown that since 2014 the value of the sector has risen from £30.9bn to £42.5bn. With the student-to-bed ratio rising nationally from an average of 2.1 to 2.3 students per bed space, it’s not surprising that the number of those choosing to live in PBSA in the UK has more than doubled in the last decade. This makes student property one of just a few asset classes that have continually delivered positive rental growth every year since 2007.

UK Student property market has 2.3 students per bed space

One of the biggest drivers of this growth has been the increasing appeal of regional university towns such as Huddersfield. With over 48,000 students currently attending higher education institutes in the town, there is a massive demand for accommodation. New developments there, such as Kingfisher Court and Cormorant House, are aiming to fill that gap, thereby providing for both students and investors.

Another factor that has proven key to the increased interest in student property is the fact that it is a stable, reliable and resilient market. Whatever else is affecting the industry, the UK’s ever-growing student population ensures that there is always a strong demand for this product.

student accommodation market in the UK

This is where new housing for students near historically prestigious universities really comes into its own. Projects like Braefoot House in Edinburgh, located just 100 metres away from Kings Campus Edinburgh University, offer investors a secure asset with on-going profitability. As our founder and director, Oliver Ramsden, says:

 

“The most recent statistics present an extremely positive outlook for PBSA in the New Year and with that Edinburgh is quickly emerging as the desirable location for investment in the sector. The QS World University Rankings 2016/17 have placed the University of Edinburgh 19th in the world, ensuring that student numbers will continue to grow heightening the need for quality student accommodation.”

 

rental growth in the UK
Rising rents are also adding to the promise of this sector, with increases of 2.7% being seen annually. In fact, over the last five years en-suite accommodation in the UK has seen average weekly rents climb from £120 to £143. This rental growth, combined with the organic growth of the sector itself, from developments such as the introduction of new, higher specification PBSA coming into the market, has led more and more investors see the true value of student property.

If you are interested in investing in student property, you can take a look at the developments we currently have on offer here.