Investing in Student Accommodation in the UK 2019

Student Accommodation Investment Advice

Over the next few weeks a familiar scene will play out in thousands of households across the country, as excited students collect their A-Level results and put final thought into where they want to further their education. A major part of this decision process is the availability of quality, affordable and well-located accommodation that will not only serve as their base for the upcoming academic year but also their socialising and networking hub. After all, it is widely thought that the bonds and friendships created here are often looked back on as the strongest and typically last for many years after graduation.

This is not just a domestic scenario but a global one too. As more and more international students defy speculation on recent economic and political changes in the UK in search of a world renowned higher education here. UCAS figures from Feb 2018 show that not only the number of international applications is at record levels again this year but those from the EU are also up by 3.6% on last year. (The Telegraph Feb 5th 2018) Proving the allure of a British education at degree level by far outweighs the potential changes in paperwork and bureaucracy.

Experts also say that another major factor of this increase is the weak Pound. Families outside of the UK can get so much more for their money now than they ever could before. A British education is officially on sale!

Purpose Built Student Accommodation

Despite a very short dip in numbers in 2017 when the referendum was initially announced, the almost unwaveringly increasing demand in recent times has, over the last 10 years or so given rise to the purpose-built student accommodation development. According to HESA, there are almost two and a half million full time students across the UK now and this naturally has a massive impact on the rental demand in university towns and cities. Add these numbers to the acute national housing shortage and it’s easy to see why the purpose-built student accommodation (PBSA) model over the last decade has risen from an obscure buy to let alternative to one of the best performing asset classes available with The Guardian suggesting that some of the world’s richest people and sovereign wealth funds are turning their heads to the asset class calling it a “must have part of their investment portfolio”.

Put yourself in the place of a talented student of Chinese origin, excited with their high school grades and the choices they have available. (Many British universities have a base requirement from Chinese students of high scoring Senior High School Certificate or Senior Secondary Academic Proficiency Test) Coming to the UK however with a drastic change of culture, language and weather, can prove a daunting task. This student’s (and their parents) desire for a degree at one of the Russell Group universities will often surpass these apprehensions. 60% of all doctorates in the UK are awarded by Russell Group universities (Russell Group profile). Once they have firmed up their university choice, the next major factor they can control is their living quarters.

The best of these PBSA developments are fully equipped with gyms, kitchens, study areas, break-out and games rooms as well as being well positioned just a few minutes’ walk from their classes and libraries. From a security point alone, these new communal living sites are highly preferable, minimising the commute and providing a modern, safe and secure living space for their child to flourish in their adopted new home.

Utility bills, Wi-Fi, insurance and gym access is all usually included in the rent too and discounts are applied for those who choose to pay upfront. So parents are able rest easy knowing there will be no unexpected costs and they have removed a number of the stresses and worries that previously came with sending your child off to university.

Liverpool for example is a city with five recognised higher education sites including Liverpool John Moores University and The University of Liverpool which is a Russell Group research specialist facility. Currently with a student population of around 60,000 across all five sites (see table below), this figure is set to grow considerably following all the investment and enhancements already underway at the Knowledge Quarter – An industry leading hub of learning and research facilities set up by the two major universities and the local government.

(Table taken from the Higher Education Student Statistics posted Jan 2018)

I use Liverpool as an example as it really does fit the perfect mould for the aforementioned foreign student looking to get the best out of the British education system. With its top ranking universities, world leading medical centres and rich cultural history, Liverpool accommodates far more than the national average number of foreign students at around 27% (HESA). HESA also states that Chinese students in particular see Liverpool as a great home away from home for their studies with one of the biggest China Town districts in the UK (second only to London).

Well positioned student accommodation in Liverpool is usually snapped up and filled on day one of applications creating a highly profitable sector for investors to enter into. This also allows developers and management companies to offer “assured rental” periods, confident on filling their sites.

Having personally worked on some of the best and most well-known student accommodation sites in Liverpool and the rest of the UK over the last 10 years, and with the likes of Cushman & Wakefield noting that £1.4bn has been spent on PBSA in the first half of this year alone and that they expect £4bn to be spent in the sector in total this year, I can say with confidence that we are looking forward to another year of fully occupied student lets and there is still certainly scope for a few more well-located, well amenitised purpose-built student accommodation developments in these major University cities.

We are looking forward to hearing from you regarding you next investment. If you would like to talk with us directly you can call us on  +44 (0) 2039507939 or send us an email at [email protected]. If this is your first time landing on Thirlmere Deacon Property Investments I encourage you to visit our homepage to read more about us and to see what we have on offer.

London Based Property Investment Company

Thirlmere Deacon Property Investment
4th Floor,
7/10 Chandos Street, Cavendish Square
London, England
+44 (0) 2039507939

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