Despite Brexit, the global demand for higher education places for students seeking to study in the UK is set to rise overall by 2020, with an increase of 870,000 higher education students, boosting demand for high-end accommodation in university cities.
While UK student numbers have stabilised, the number of international students are set to rise dramatically in the next decade. 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.
Savills has reported that investment in student accommodation in the UK has increased by 17% year on year. It is expected that £5.3bn will be invested in purpose-built student accommodation by the end of 2017, compared to £4.5bn last year and a record £6bn in 2015.
International students can be very profitable for landlords and letting agents, as many are prepared to pay higher rents for superior quality accommodation. Research from Knight Frank shows that the average weekly rent of a room in a student accommodation block is £126, according to Knight Frank, rising to £180 in Oxford and £200 in Guildford. International students are also good for the UK economy, generating more than £25 billion and providing a significant boost to regional jobs and local businesses.
According to UK guarantor service, Housing Hand, one of the biggest problems that international students face when renting a property is not having a UK guarantor.
Jeremy Robinson, Managing Director of Housing Hand comments: “This is a huge worry for students who are not able to pay 6-12 months in advance to secure their rental property. However, students who are unable to provide a quality UK guarantor can, provided they pass the Housing Hand application process, purchase our guarantor service.
The good news for landlords and letting agents is they can access the huge potential market of international students and the previously too risky market of tenants, with poor credit history. We offer letting agents and tenants reduced financial risk and for both, a widening of what is available on the market.
Those landlords and letting agents that have partnered with us have been able to increase occupancy, due to larger pool of creditworthy applicants and have been able to eliminate the risk of rent loss, due to tenant default, at no cost to them."