03 Apr, 2020

Why should you invest in student property?

2019 10 25 Student 3

The UK higher education sector is more popular than ever. An incredibly high number of students enrol in our universities annually, including tens of thousands of overseas students who require luxury accommodation.

However, there are simply not enough traditional university halls of residence to meet the demand. Instead, Purpose-Built Student Accommodation (PBSA) has stepped in to fill the gap – and in the process has become one of the world’s most impressive investment markets.

Here are the reasons why you should invest in UK student property…

This is a booming market

There has never been a better time to put your money into student accommodation. As student property has matured as an asset class, everyone from individuals to large portfolio investors have recognised the benefits.

The latest Global Student Housing Investment Report from Savills shows that more than US$17bn is invested in the sector annually. Furthermore, it shows that both demand and yields are set to remain strong in the long-term – particularly in the UK.

While it used to be considered an ‘alternative investment’, student property is now a mainstream market, bringing with it all the security and future growth prospects that come with that status.

Tenant satisfaction at an all-time high

As PBSA developments become more commonplace, and PBSA becomes the default accommodation across the UK, tenant satisfaction has increased. The higher standards of accommodation, superior facilities and improved value for money inherent in a modern PBSA development have raised the bar, and modern student tenants demand nothing less.

The latest Student Accommodation Survey from UCAS and Knight Frank shows that three quarters of all students who live in private student accommodation would recommend it to others – a staggeringly high percentage. Even more (78%) said that they were happy with the overall standard of accommodation, far higher than any comparable numbers for traditional halls of residence.

It is likely that the extremely high satisfaction rates will lead to even more students choosing to rent privately in the future, with the potential for tens of thousands of new tenants in university towns and cities.

Enormous predicted demand

Overall student numbers in the UK have grown by more than 114,000 in the last five years, and that number is set to be dwarfed in the next decade, with the JLL UK Student Housing Report projecting an additional 500,000 students will enter the sector in the next 10 years.

At the moment there are approximately 650,000 student beds in the UK, meaning that more than half of all student accommodation is now in the private sector. As the number of student tenants increases, the demand for these units will go up with it, particularly considering the high satisfaction rates discussed previously.

According to JLL calculations, if we see another small swing of just 10% from traditional halls of residence to private student accommodation, that would mean an additional 100,000 PBSA units would be required – a huge boost for the UK student property market around the corner, and one that any property investor should take a serious look at.

There has never been a better time to invest in UK student property. The market is growing rapidly, tenant satisfaction is high and we are on the cusp of an even bigger influx of students demanding private student accommodation.

For more information and to discuss property investment options, please get in touch with our team today>>please get in touch with our team today>>

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Alliance Investments

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Trafford Park, Manchester M17 1QS.

+44 (0)161 416 6244
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