Student property may have popped up relatively out of the blue in recent years, with its rise from somewhat niche asset class to fantastic investment option taking many people by surprise, but it has not yet had its moment in the sun, even in the face of one of its largest challenges to date; Brexit.
Student property remains strong
The vote to leave the EU was predicted to bring about negatives for large parts of the UK property market, chief among which was student property. The entire growth of the market and its popularity among investors has been fueled by demand and demand alone. More students meant more need for student accommodation, and with universities unable to cope with this need for housing, the private sector stepped in and continues to improve supply levels.
However, the Brexit vote was predicted to play a catastrophic role in the fortunes of the sector, because on one hand it was thought it would make the UK seem less favourable to overseas students, and on the other, it would change the eligibility rules for non-UK EU students.
It was feared that the loss of even a sizeable chunk of the 125,000 EU students in the UK could mean a large fall in demand for private sector student accommodation. However, this does not appear to be the case, and four months down the line, we can look at the realities of the Brexit vote and see that student property, and the student market in general, still has a way to go yet.
Student numbers were expected to fall in the aftermath of the Brexit vote. There were fears that the vote would create an air of panic, and that those not sure of their future might choose to go straight into employment rather than studying. It was also predicted that we could see a sizeable fall in the number of students coming from overseas, either because they feared what Brexit would mean for their status here, or simply because an independent Britain looked like a less appealing prospect.
Reality turned out differently, however, to how this academic year looked on paper, and when universities opened their doors throughout September, there were actually more, rather than fewer, students ready to take up places. Ucas data shows a rise of three per cent, in fact, on last year, showing that at least some of the fears over Brexit were overestimated.
Post-Brexit student numbers
The major fear among those who were earmarking the student market for a fall after the referendum was that it would mean fewer EU students coming into the UK for university, whether through choice or changing regulations.
However, CBRE reports show that at the moment, only around six per cent of all undergraduate and postgraduate students in the UK are from EU countries outside the UK, which, even at 125,000 students potentially lost to the sector, is not all that significant a number in the grand scheme of things.
Experts also believe that even in the case of a ‘hard Brexit’, which many now consider to be the most likely outcome of the triggering of Article 50 next year, the reputation of British universities, and the demand that Ucas sees which continues to rise year after year, would mean domestic and other international students picking up the slack and keeping demand high.
On the whole, it would appear that while there were many out there who had fears over what Brexit could mean for the future of the student property market, the sector still has that underlying strength, buoyed by demand, to help see it through.