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Student accommodation news

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  • Student Accommodation News

Newcastle-upon-Tyne is a vibrant city in the north-east of England and a great place for students to experience life and take their first steps into adulthood. As such, there’s little mystery to why students from across the UK and around the world are attracted to this bustling and exciting city.

It means there are a wealth of opportunities for investors in student accommodation to provide a service to this group, with thousands of students in need of homes every year, delivering a guaranteed return for those take the plunge and invest.

Now, a new report published by Knight Frank has examined the existing landscape for student accommodation in Newcastle and in it highlights a significant need for future investment to meet the growing demand for more private accommodation across the city.

Location overview

Newcastle offers two major higher education institutions, Newcastle University and Northumbria University, each of which attracts thousands of students every year. Ranked 22nd and 65th respectively in the Times Good University Guide 2018, each delivers levels of student satisfaction in excess of 83 per cent.

This is positive news for investors, as it highlights the continued reliability of student attraction to these institutions, which in turn ensures high levels of demand for student accommodation in the area.

With a combined student population of around 50,000, there is currently great potential for investors in the student accommodation sector to tap into this bustling marketplace. Indeed, this is especially true within the private rental sector, as the combined capacity of Halls of Residence for the two universities currently stands at just over 8,900.

Overall, this leaves almost four-fifths of the city’s students in need of accommodation outside of the universities, with private landlords playing a key role in ensuring the supply of available homes for rent.

Rising demand from a growing market

Increasingly, both of the city’s universities are witnessing a rise in demand for student placements, with Newcastle University receiving 6.5 applications for every available place and Northumbria University showing similar levels of strong appeal (5.6 applications per available place).

An encouraging characteristic of the Newcastle market also lies in the fact that 22.6 per cent of the city’s student population (9,975 of the 43,390 total in 2015/16) are coming from abroad. International students therefore make up a growing number of university placements and, as student numbers across the board continue to climb, this is leading to a wide array of opportunities for investors in essential private accommodation to house them.

Indeed, this is the case at present, with large levels of investment already being witnessed by both universities in expanding their offering to students. Newcastle University is involved in delivery of the £250 million Science Central project in joint-partnership with the city council, which aims to increase the scope of the institution’s scientific offering to help make Newcastle one the UK’s six designated ‘science cities’.

Meanwhile, Northumbria University has invested £200 million over the last ten years in its impressive city centre campus, with a further £52 million to be spent during the coming two years on improved facilities and boosting student outreach. Both institutions remain heavily investing in increasing the scope of learning that they offer, with rising student numbers an expected result.

Strong potential for future growth

It therefore begs the question, how are the growing number of students in Newcastle to be accommodated? Overall, almost two-thirds (64.6 per cent) of all full-time students at present remain outside the scope of student-specific accommodation – highlighting the rapidly growing need for more student-specific homes. This significant undersupply is therefore a challenge that local planners are aiming to address, as the majority of students continue to reside in HMO – houses of multiple occupancy – accommodation of varying quality.

As mentioned above, this lack of existing supply also means the market for student properties across the city is currently booming, with significant opportunities for investors. Despite continual investment in Newcastle’s purpose-build student sector, there is significant scope for new developments that will further meet demand for student homes in the years ahead.

Investors hoping to make their mark in a city where supply continues to fall below levels of demand for high-quality, affordable student accommodation will therefore have significant opportunities to advance their plans for new projects in the short- to mid-term. Investment in Newcastle’s student property market could be a fantastic opportunity for investors to consider.