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Student accommodation

Why student property investors can expect strong demand for the next decade

Author: Gemma

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Research from JLL has suggested there will be an additional 500,000 full-time students in the UK by 2030, meaning investors can expect strong demand for purpose-built accommodation in university towns and cities.

Purpose-built student accommodation has emerged as one of the stand-out sectors in UK real estate in recent years, partly thanks to the strong yields it has delivered to investors.

For those thinking about entering this market in 2020, one of the key considerations will be the reliability of demand from tenants, since this provides the fuel for further growth in yields and minimises the risk of void periods.

These would-be investors can take encouragement from the latest research by real estate services firm JLL, which predicts there will be an additional 500,000 full-time students in the UK by 2030.

One of the key factors in this trend is the anticipated increase in the 18-year-old population from 2021.

Furthermore, the UK is expected to see strong demand from international students in the coming years, which is good news for investors, since this demographic is often prepared to pay a rental premium for good amenities and a convenient location.

JLL referred to UCAS figures for January 2019 showing that, despite Brexit, UK university applications from EU students were up by 1% year-on-year, while applications from the rest of the world increased by 9%.

The report authors noted that the pool of students worldwide who are choosing to study overseas is growing.

“The quality of universities is important in attracting that demand to the UK, but so too are other factors including language, cost, political and cultural benefits,” they added. “The UK has consistently held its position as the leading destination after the USA.”

Buyers looking for investment opportunities in the UK student accommodation sector will find some of the most exciting prospects in popular university cities like Cardiff and Newcastle.

To find out more, give Experience Invest a call on +44 (0)207 834 1113, or book a one-on-one consultation.

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