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Student accommodation

Demand exceeding supply in Newcastle student accommodation market

Author: Staff





One of the key factors that makes student accommodation a particularly attractive investment in the UK is the reliability of demand, with the country’s higher education institutions continuing to prove a major draw for domestic and international students.

Newcastle is one location where this trend is particularly evident. This was underlined by a recent Knight Frank report that highlighted the degree to which demand for purpose-built accommodation exceeds supply in this popular city.

The supply/demand imbalance

The research noted that the city’s two main higher education institutions – Newcastle University and the University of Northumbria – have over 43,390 students but are only able to offer accommodation to 8,365 people, either in halls of residence or bedrooms under nomination agreements.

In total, there are currently has enough beds to cater for only 40 per cent of the total student population in Newcastle. The data shows that currently 25,999 (60 per cent) students are unable to access purpose-built or university operated student rooms.

Knight Frank also noted that, even taking into account the consented development pipeline of 3,615 bed spaces, more than half (52 per cent) of the city’s students would still be unable to access purpose-built accommodation.

Many undergraduates are currently forced to rely on other housing stock of varying quality, paying rents that don’t include utilities.

All the signs indicate that Newcastle’s two main universities will continue to attract new students in the foreseeable future. Both institutions have experienced stable application numbers in recent years and forecasts suggest this will continue in the short to medium term.

Newcastle University has recently been involved in the £250 million Science Central project with the city council. It has also invested in improvements such as the King’s Gate building for student services, better disabled access and upgrades to the science and engineering laboratories. Watch video to find out more information about investment in Newcastle.

The University of Northumbria, meanwhile, has invested £200 million in its city centre campus over the past ten years, as part of its ambition to become one of the UK’s top 30 universities.

A positive environment for rental property

Combined, all of these factors create a positive picture for ongoing property development and investment in student accommodation in Newcastle.

Buyers looking for the strongest possible rental yields from buy-to-let property investments will benefit from ongoing strong demand, as the city’s universities continue to attract high numbers of students.

Purpose-built developments such as Opto Student Newcastle, which is currently under construction, will help to meet this demand. Features including a modern gym and games room will attract the attention of renters, while investors can benefit from assured eight per cent net rental returns for five years.

For buyers interested in entering Newcastle’s lucrative student accommodation market, this could be the ideal opportunity.

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