Over the past 20 years, the student accommodation market in the UK has grown and evolved. There are a number of housing options available to students – university halls on cam- pus, traditionally for first years, privately-funded purpose-built student accommodation (PBSA) and rented accommodation off campus managed by a private landlord.
It is no longer assumed that students will go straight into university halls for their first year and on to rented accommodation for the remaining years. The market provides options to suit different consumer needs, personalities and budgets, so everyone is catered for.
Many students are looking for a housing arrangement in a bustling environment that will help them make friends and build their social network both inside and outside the walls of the university.
Other students, for example postgraduate or mature students, look for quieter places of solitude where they have everything they need in one place without lots of activity around them, so that they can focus on their studies and relax peacefully in their down time. One thing is for sure, there is no short- age of student accommodation options – there is something out there to suit everyone.
PBSA has changed significantly since its introduction to the market over two decades ago. Bedsits and squats may have been the norm in the nineties but with the vast selection of en suite bedrooms, studio flats and apartments now avail- able, today’s student has much greater expectations.
According to research from Savills, the UK property investment market is seeing record levels of investment in the sector, with £4.2bn in the first five months of 2015, already exceeding levels achieved for the whole of 2014. A small proportion of this investment so far this year has originated from within the UK; however, a vast majority has come from overseas investors, in particular, North America and Russia.
There are around 210,000 PBSA beds currently in the market and the development of these beds over the last 20 plus years has been essential to the UK higher education sector’s growth both domestically (UK students) and internationally. The presence of privately-funded accommodation has allowed universities to ramp up student recruitment and invest in academic space, without having to devote time and money into accommodation. PBSA has also helped alleviate pressure on the housing market allowing more families, rather than students, to reside in privately rented accommodation.
First year UK undergraduates and international students are seen as the core market that demands the largest proportion of PBSA homes. However, requirements from final year and postgraduates seeking this type of high quality, secure accommodation are on the rise.
Most PBSA properties offer all-inclusive rent, high-speed internet and 24-hour resident security, making this an attractive option to students of all ages and backgrounds.
The UK is a world leader of higher education, home to three of the top 10 globally ranked universities and 11 of the top 100 (source: Times Higher Education World University Rankings). According to the OECD, 13 per cent of all internationally mobile students are studying in the UK and this global market share is anticipated to rise further.
Tuition fees increased from £3,000 to £9,000 in 2012/13, how- ever, this hasn’t deterred UK and EU undergraduate students from entering higher education: both cohorts have grown steadily year on year since 2012. Non-EU students, who were not affected by the tuition fee rise or student number cap, have also been growing, reaching record numbers in 2014/15. (Source: Ucas)
The outlook on student numbers appears to be positive with Ucas recently publishing statistics showing undergraduate applications for the June deadline reached record levels this year. This continued increase in higher education demand should be supported by the removal of the student number cap from 2015/16 onwards, allowing universities to recruit as many students as they have capacity for. The higher ranking institutions should be best placed to take advantage of the cap removal; however, less established universities may struggle.
Jeff Manno is managing director of Prodigy Living prodigy-living.co.uk, the student accommodation brand of Greystar Europe Holdings Ltd. Greystar is a US firm with a long standing reputation for world-class service in the multi-family real estate sector.Reuse content