With the UK’s biggest cities expecting to see a rise in student numbers of more than 50 per cent in the next decade, student property investment is predicted to go from strength to strength over the coming years, according to the latest report from JLL.
So far, student property investment in 2015 has seen records smashed. With 2012, 2013 and 2014 all having contributed more than £2 billion each to the market, it was expected that 2015 would be a similarly strong year.
However, no one would have predicted just how strongly this year would actually perform in the end. While we expected some growth, the £3.8 billion invested in the first half of the year was a real surprise. By the end of 2015, it is predicted that investors will have spent some £5.7 billion on student homes, almost as much as the last three years combined.
The report said that the growth from less than £500 million of investment in 2010 to what we have now has been a result of the 50 per cent growth in foreign students coming to the UK in the last ten years.
On top of this, there has also been a significant rise in the volume of students who are looking to rent privately, which is good news for landlords, as rising demand means a more steady income. In total, JLL said, 28 per cent of all students now look for this sort of accommodation rather than renting through their university.
In years to come, as student numbers continue to grow, this demand for places to live will only go one way, and landlords will see it as their responsibility to continue to provide, which should mean even more investment across the next few years.
“We have seen extraordinary growth in UK student numbers over the past 20 years and while UK student numbers are now stabilised, international student numbers set to rise dramatically in the next decade,” said Philip Hillman, chairman of JLL’s Alternative Division.
“The provision of good quality student accommodation was traditionally the responsibility of the universities but in recent years, most new accommodation had been provided by private investors and developers.”