Demand has been the driver of the rise of what has become one of the most popular investment assets in the UK and overseas. As student numbers have climbed over the past six years, even withstanding the introduction of higher tuition fees back in 2012, more students have moved into the private sector and away from university-owned accommodation.
However, as this year sees the first slight decline in applicant numbers for some time, is there still that demand for student property that there has been for the past few years?
According to UCAS, in its report from the January application deadline, this year saw more than 560,000 people apply for courses in the UK, both undergraduate and postgraduate. And while this is still a very impressive number, it does represent a small fall of around five per cent when compared to the number of applicants that we saw at the same point in 2017.
But at the same time as there is an expected fall in the number of students heading to university for the first time this year, there is a rise in investment on the cards, with more than £5 billion expected to be spent in the property sector.
So why is this the case? And is it true that even as there’s believed to be a fall in student numbers, demand can still rise?
Brexit and student property
One thing to remember in this regard is that the number of students is likely to recover in the not too distant future. The January 2017 deadline for UCAS applications represented the first annual wave since the UK voted to leave the European Union last June. There’s still some degree of uncertainty around at the moment in terms of what Brexit will mean for students, and particularly those coming to study in the UK from the rest of Europe.
Blips in trends are commonplace when such political uncertainty is evident, and it’s likely that once the details of Brexit are ironed out, then there should be a return to the climbing student numbers we’ve seen for some time in the UK, meaning demand should remain largely strong for years to come.
Other reasons not to worry about the future of the property market include the fact that we already have so many students in the education sector. Even if there has been a temporary slide in applicant numbers, the UK has, according to Universities UK, more than 2.28 million students, as of the last academic year.
This means that even at a time when perhaps there won’t be as large an intake as enjoyed in recent years, the UK student property sector will remain resilient, based on the fact that there are already so many students around, helping keep demand high.
Changing face of UK student property
Finally, another reason that demand shouldn’t be something investors worry about too much is that of the changing needs of students.
In the past, it was the case that students would live in university accommodation for a year, before moving into a small, dingy, shared flat with others. But times are changing.
Students are increasingly looking for something that meets their more advanced needs. Places that are close to university and the nightlife, while offering amenities like strong broadband connections and the ability to study and socialise all at once, are increasingly popular, allowing those investing in the private sector the peace of mind that students looking for the types of home they have to offer are growing, not falling, in number.