This ‘overhang’ represents almost 20,000 beds nationwide – about 10% of all private student halls accommodation in the country.
This is the explanation given by Liberty Living firm Brandeaux for not attempting to sell properties to repay investors who want their money back, as they feel prices may be pushed down by lack of demand and over supply.
The Opal Group properties are on sale for around £1 billion and have effectively doubled the accommodation coming on to the market this year.
“This represents an excess of student property for sale compared with historic availability,” said a spokesman.
The firm blames oversupply in the student housing market as one of the reasons for suspending their funds earlier this month.
Some IFAs have complained their clients may take up to two years or more to get their money out of student investment funds.
All the number of bedrooms on the market creates a headache for investors and developers, who might not achieve business plan targets; Brandeaux does not foresee any booking issues from students.
The firm believes the markets are separate and that still more students are looking for accommodation than the market can supply.
Liberty Living has around 17,000 student beds in halls across the UK at several major university towns and cities. The student fund is estimated to be worth around £1 billion.
Financial media are also reporting that Brandeaux has concerns over regulatory restrictions on open-ended investments that may impact on their funds.
“There is no reason for investors to panic or to worry that they have lost any money. All Brandeaux funds remain completely solvent and can meet all of their operational cash needs,” said the spokesman.
