StuRents
, a well known platform for student accommodation, recently released details of their research. The research revealed that the purpose built student accommodation market has seen growth of around 2.6% in 2020. This growth has resulted in over 25,000 more beds available in the UK for students.
For many years, the accommodation that UK universities were able to supply was always more plentiful than the purpose built student accommodation market could offer. But these latest figures from StuRent show that for the first time ever, the number of purpose built student accommodation beds out numbers those on offer from universities.
This is all the more remarkable when you consider the challenging times which we are living in at the moment. There are significant changes to social conditions and to say that there was uncertainty over the UK economy would be an understatement.
UK Student Accommodation Demand strong in the UK
The demand for student accommodation across the UK remains as strong as it ever was. Recent data from UCAS reveals that 40% of UK 18 year olds applied to study at a UK university in 2020. This is the highest number of applications ever recorded.
Another factor to take into consideration is that the 18 year old population continues to grow in the UK and in the next ten years the 18 year old population is expected to reach 176,000. A growing 18 year old population will mean an even stronger demand for higher education in the UK.
There is no sign of the popularity of UK universities among international students from outside the EU abating either. The number of acceptances rose in 2020 for international students, with an increase of 8.8% on 2019. This is despite the uncertainty from the Covid-19 pandemic and Brexit.
Higher Education Institutions
There are a number of Higher Education Institutions (HEIs) in the UK and the demand for these is up as well. In 2020, the acceptances increased by 12.1% when compared to a decade ago. Medium tariff institutions saw a rise of 1.3% while lower tariff institutions were slightly down at -0.3%.
The result of this is that there is now quite a disparity between the institutions considered the best performers and those considered the worst. If you are interested in the purpose built student accommodation market as a property investor, we suggest that you look at the different areas of the country on a case by case basis.
StuRents suggests that in Sheffield there are around 48,000 students looking for good accommodation this year but there are less than 30,000 purpose built student accommodation beds available. Meanwhile in Leeds, StuRents saw an increase in demand of over 5,000 with the supply of purpose built student accommodation up by 3,100 for the same period.
HMO Market still strong
The StuRents research also showed that HMO’s (houses in multiple occupation) are still dominant in the student market. Their figures showed that a minimum of 55% of all student beds were HMO’s. An increase in rents of 3.5% has not dampened the demand for HMO accommodation among students.
The feeling is that an early lettings cycle which made it somewhat insulated from the effects of the pandemic shielded the HMO market. While the purpose built student accommodation market does not have this shielding, the demand remains strong and savvy investors are providing beds where there is the most demand.
