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Student accommodation

British student housing investment to hit £5.75bn

Author: Staff





British student housing report posts record investment

The amount of investment coming into the British student housing market in 2015 could end the year nearly three times greater than what we saw last year. In the last two years, the market has been growing, and many celebrated the fact that both 2013 and 2014 ended with investment greater than £2 billion, the first time this figure had been reached.

However, according to the latest statistics, the market has really taken off this year, and demand from investors for stock as they capitalise on growing student numbers and strong demand for student property has meant a strong first half.

British student housing investment increases

According to the latest figures released by JLL, the second quarter of 2015 has seen £1.6 billion of transactions. This is a staggering 126 per cent higher than was seen in the same three-month period just a year ago.

When we add this to the record levels of investment that were recorded in the first quarter of this year, we have a marketplace in which some £3.8 billion has been invested already in the first six months of the year. This is already almost double what we witnessed in 2014.

And the forecasts are that the higher levels of spending from investors will only continue throughout the rest of this year, with JLL expecting to see £5.25 billion spent in total by the end of December, taking total transactions to a level almost three times as high as we saw in 2014.

What the experts say

Philip Hillman, chairman of the alternatives group at JLL, said: “We have seen significant investment in UK student housing so far this year, with particularly strong interest from Russian, Canadian and US investors. This is a trend we expect to continue as we push into the second half of the year.

“As the alternatives sector becomes increasingly mainstream, the liquidity in the market and increasing variety of investors with diverse underwriting approaches to the sector dynamics continues to drive investment.”

JLL believes that the reason behind the stark increase in spending this year has been the fact that more and more students are applying to universities all the time. This year, UCAS has recorded record high applicant numbers by its January deadline, and when this happens, demand for private rented properties can only increase as universities struggle to keep up with the need for accommodation.

The two per cent rise in applications is only good news for landlords and British student housing investors, and if this trend continues, we could see the student property market continue to go from strength to strength for some time to come.

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