One of the most appealing aspects of the UK’s purpose-built student accommodation (PBSA) sector for investors is the reliability of tenant demand, and according to recent research from Knight Frank, the need for well-equipped, conveniently located housing is set to remain strong for the foreseeable future.
The firm’s Global Student Property Report 2019 noted that, while demographic trends mean the number of 18-year-olds in the UK is falling, domestic demand for student accommodation is expected to rise in the long term.
Analysis of population projections from the Office for National Statistics, combined with entry rates from UCAS, indicates that full-time undergraduate numbers will increase by 15 per cent between now and 2030. That would equate to an increase of 220,000, to more than 1.7 million students.
Looking at the international picture, non-UK citizens now make up 16 per cent of all full-time undergraduates and 19 per cent of higher-education students overall. Overseas applications for the 2019-20 academic year are up by six per cent.
“A rise in applications from international students comes in spite of uncertainty surrounding the UK’s future relationship with Europe and serves to highlight the global appeal of UK universities,” Knight Frank noted.
The ongoing interest in pursuing higher education in the UK, and resulting demand for student accommodation, will provide reassurance for investors entering the sector this year and beyond.
Furthermore, the increase in applications from overseas is expected to have an impact on the type of accommodation coming onto the market. According to Knight Frank, most PBSA developments being delivered for the 2019-20 academic year are en-suite and cluster-led schemes, which reflect the affordability pressures facing many students.
To find out more about the latest trends and opportunities in PBSA, download Experience Invest’s 2019 UK Student Accommodation Investment Guide.