The number of new student accommodation has soared because of high demand.
A new report by Savills estate agents, mentioned in a PropertyReporter.co.uk article from October 2017, listed the top university towns ranked by the number of new student accommodation developments. Number one was London, followed by Bath, Brighton, Bristol, Edinburgh, Exeter, Guildford and Leeds.
All these areas have high occupancy and high rents, with demand expected to grow. The full-time student population of London is predicted to increase by 50% in the next 10 years, which could result in a student accommodation shortfall.
The amount of money invested in new student accommodation in 2017 is expected to be around £5.3bn – a 17% increase on 2016.
Many new student properties charge high rents, with some students paying between £250 and £500 a week for studio apartments. For these high rents, students expect luxury standards and extra facilities such as gyms, communal lounges, and fast Wi-Fi connections.
Savills said that 112,000 students from the EU study in the UK, along with 285,000 from outside the EU. Overseas students make up 23% of all UK students and contribute about £25bn to the UK economy each year.
For landlords wanting to invest in new student accommodation, or redevelop existing property for student use, commercial mortgages are available. Many buy-to-let landlords, facing rising costs, are looking to diversify their portfolio, so student accommodation can be an attractive investment opportunity – especially if catering for students who are prepared to pay extra rents for high-quality accommodation.