The growth of the UK’s purpose-built student accommodation (PBSA)
sector has been so rapid that it can now accommodate 1 in 4 students,
research reveals.
The findings from EG show that Swansea University has the most PBSA units
at 420 units.
Sheffield Hallam University is in second place with 221 PBSA units, and the
University of Liverpool is close behind with 216.
EG says that there are now enough beds to house a quarter of all students –
that’s 600,000 students in total.
Student numbers have rocketed in recent years
The accountancy firm says that as student numbers have rocketed in recent
years, so too has the demand for more accommodation.
And that demand has been increasingly met by investors ranging from pension
funds to private equity. EG has calculated that they are set to invest more
than £6bn this year.
One reason for the popularity of PBSA is that the sector has consistently
delivered steady yields – and with recent news of students struggling to
find somewhere to live for their studies means that demand from PBSA
providers and private landlords alike shows that this overheated rental
market will offer good returns for a few more years.
Universities are ‘shying away’ from making capital expenditure
The EG report also highlights that universities are ‘shying away’ from
making capital expenditure into student accommodation as another reason for
underpinning the sector’s popularity.
The research also highlights that PBSA units can help to regenerate
neighbourhoods that may have been neglected previously.
The top four most expensive destinations for students living in a PBSA unit
are London, where rents cost more than £2,000 on average; Brighton where
students pay around £1,250; Leeds where the rent is under £1,000 and
Nottingham on slightly less.
Demand for high-quality student accommodation
EG’s data director, Anna Reed, said: “Increasing student numbers combined
with decreasing availability of rental properties has seen the demand for
high-quality student accommodation rise dramatically, particularly in
Swansea, Sheffield and Liverpool.
“Providing a diverse range of property options from large student halls to
more exclusive residences with on-site facilities such as gyms, PBSA is
evolving the student experience and making cramped shared houses a thing of
the past.”
She points out that while the PBSA sector has grown quickly – there are
another 1,544 schemes in the pipeline.
Ms Reed added: “It’s not surprising that regulation is racing to keep pace.
“The arrival of the government-backed National Code, which states that
developers must compensate students if their accommodation is not ready on
time, means developers need to be alert to overrunning construction to
retain maximum profitability.”
Follow London’s lead in a bid to combat rising rents
She also says that in future, more local authorities will follow London’s
lead in a bid to combat rising rents by mandating that a proportion of the
rooms in a PBSA development must be classed as ‘affordable’.
Simon Thompson, the managing director of Accommodation for Students, said:
“The rise of the purpose-built student accommodation sector has been
obvious in recent years thanks to lots of investment and high demand from
students.
“Private landlords also offer quality student accommodation that can be
more attractive and is usually cheaper too.”
He added: “In coming years, private student accommodation and PBSA will sit
alongside each other to help meet this student demand and both will be
offering quality homes that students can rent close to their campus.”
Breakfast club to help students
A student union has revealed that it has opened a
breakfast club to help students
struggling in the cost-of-living crisis. The University of Reading
students’ union says it is offering budget-friendly meals, a warm welcome
and practical support. The university says it is working with the union to
help students, particularly those who are worried about finances.
Convert a famous nightclub into student flats
The people of Glasgow are being asked for their opinion on plans to convert
a famous nightclub into student flats. The move will help alleviate the
chronic
shortage of student homes
in the city which has led to some students cancelling their studies or
having to commute from home or other towns and cities nearby. The
redevelopment will be home to 230 students in a state-of-the-art facility
that would contain fully serviced apartments. The Archaos nightclub has
been empty since closing in 2007.
