The Growth In Student Investment

25th April 2019

There has been a real awareness in recent years for the value of student accommodation. An extremely valuable sector, once dominated by the universities themselves, is gradually becoming more populated by the private sector. With deep pockets supported by loans and the bank of mum and dad, students can afford high rental figures. Providing a valuable opportunity to the private sector to offer accommodation of a much greater quality.

Growing demand for high-quality accommodation from both freshers and older years has seen providers have to step up their game. No longer do students want houses where the walls are barely standing, instead seeking kitchens fitted with modern appliances and en-suite bedrooms.

The rise in demand for student housing in recent years has created an extremely valuable marketplace for property investors. In the 4 years from 2010 to 2014 Savills noted a 4 fold increase in investor volume, from $2bn to $8bn and in the last 4 it has doubled again to $16bn. Even with the uncertain political climate, the renowned UK higher education system draws in investment from all over the globe due to its attractive and stable income stream. However, a lot of this investment has been concentrated around a select group of cities, including Bath, Edinburgh, Manchester and Liverpool, possibly even saturating the market place. This does mean that there are a lot of cities that have been overlooked and are still ripe for investment, most notably Exeter and Glasgow. Both of which have strong demand and attractive future prospects for student growth.

Taking the student sector as a whole, it shows no signs of slowing as more A-Level students than ever apply for higher education and the number of international students continues to rise. Admittedly the highest demand is still for Russell Group institutions, so picking cities where they have a strong presence is of the utmost importance. This is bolstered by a weakening pound making UK education cheaper for foreign students and degrees being a prerequisite for many employers.

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