Student accommodation sector in strong shape and expected to grow

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A report by real estate consultants Cushman & Wakefield has revealed that 30,000 new student bed spaces were added in 2017, which is an indication that the student accommodation sector is in good shape.

According to a Property Magazine International article from January 2018, rents have increased by 2.9% in the 2017/18 student year compared to the previous year. In Manchester, average student rents have risen by 5%. The private sector charges more rents than accommodation owned by universities, and has built the majority of new student accommodation, but universities still provide 57% of the total.

Many new student blocks are at the luxury end of the market and charge large rents. David Feeney of Cushman & Wakefield said that there is an opportunity for private landlords to meet the demands of less well-off students who need more affordable rooms.

Around 1.4 million UK students attend courses away from home. The UK is also a global education hub with a large number of foreign students studying in Britain. Universities actively market to overseas students, as they account for 26% of all tuition fees. Britain’s departure from the EU has not yet impacted the number of overseas students, and the weak pound makes studying cheaper for them. Student numbers are expected to grow, so there will like continue to be a high demand for student accommodation.

David Feeney says that student accommodation is an attractive investment with good rental yields.

Commercial mortgages are available for purchasing student accommodation, or for developers to build new student blocks.

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