New research by Savills has found that the number of new student accommodation developments are soaring across the UK to meet the rising numbers of students forecast over the next 10 years.
According to the figures, Bath is the UK’s top hotspot for student accommodation development, because of strong demand characteristics, high occupancy levels, strong rents and good prospects for rental growth. In second position is Birmingham followed by Brighton, Bristol, Edinburgh and Exeter.
This year saw three new places moved up to the top ten, including Exeter, Guildford and Leeds.
The London market represents the largest city in the UK for student housing. According to JLL, London’s full-time student population is expected to rise by 50% over the next 10 years, which will exacerbate the existing shortfall in student housing supply.
According to Savills, investment volumes are to reach £5.3bn in 2017, up 17% on 2016 as investor confidence returns after the EU referendum.
Jeremy Robinson, Managing Director of Housing Hand comments: “Just this month, the University of Brighton was granted planning permission for a new student accommodation project for £60-80 million, which will see the development of 804 rooms in two towers, with construction due to be completed by September 2019.
These new developments are popping up all over the UK and are good news for students. Historically, many have found it difficult to find affordable accommodation close to universities and have had to opt for purpose built student accommodation (PBSA). Typically, rents are high in this type of accommodation, all though the spec is high, which proves very attractive to international students.
Students are paying £280 - £500 per week for a studio apartment and many more are unable to provide a UK guarantor to secure accommodation. Based on these figures, potential UK and international students without a UK guarantor in London would have to find up to £26,000 to cover the deposit and six month’s rent. Even if potential tenants can pay in advance, they may still need a UK guarantor. This can be a huge worry and for many, a real obstacle to going to university.
However, we mitigate all the risks for letting agents and landlords by becoming the potential tenant’s UK guarantor. We provide UK and international students who have failed a credit check with guarantor liability insurance policy. This ensures that the rent payments are paid in the event of the tenant defaulting on the rent. Landlords and letting agents who are partnered with us have been able to increase occupancy, due to larger pool of applicants that can now qualify and they have been able to eliminate the risk of rent loss, due to tenant default, at no cost to them.
According to Savills research, the UK attracted 112,000 fulltime students from the EU and 285,000 from other countries last year, making up just under 23% of the full-time student population. These students contribute £25bn (Universities UK) to the UK economy each year through tuition fees and other spending such as accommodation and services.
Forecasts show that international student numbers are to rise by 6% per year over the next three years. University applications from Chinese students have almost doubled over the last decade, to 14,000 in 2016. With the sterling – yuan exchange rate 8% lower than it was before the EU referendum, this growth is expected to continue.”