At Graysons Properties, we view student property as a pivotal aspect of the real estate market, encompassing buying, selling, and letting activities. It presents a lucrative investment opportunity for landlords and investors, with promising yields.
In recent years, the broader property market has seen significant transformations, prompting the need to evaluate the trajectory of the student property sector.
Demand Trends: The consistent increase in student enrolment at UK universities is a notable trend, expected to persist due to the growing population of 18-year-olds. Government forecasts indicate a 7% rise in student loan demand by 2027/28, suggesting a corresponding increase in the need for student accommodation.
Supply Landscape: Student accommodation enters the rental market through various avenues, including university-provided halls, purpose-built student accommodation (PBSA) developments, and private student house shares. While PBSA supply has grown substantially, concerns linger regarding its ability to keep up with rising student numbers. Challenges such as cost uncertainties, labour shortages, and regulatory changes may impede future supply.
Additionally, there’s a noticeable tightening of supply in the private student accommodation sector, influenced by regulatory changes and alterations in tax incentives, prompting some landlords to divest their properties.
Current Market Conditions: Reports highlight a shortage of student accommodation, with students encountering difficulties in finding suitable housing. Instances of universities resorting to temporary accommodation or deferral suggestions for students underscore the severity of the shortage.
Recent assessments by StuRents reveal significant shortfalls in student beds across various towns and cities, with projections indicating a widening gap in accommodation availability by 2025. Areas like Durham, Glasgow, York, and Manchester are notably affected.
However, not all student-centric cities have experienced increased demand. For example, places like Coventry and Sheffield are grappling with an oversupply of accommodation. If you’re an investor in a city with surplus housing, Graysons Properties is prepared to meet with you to explore strategies for diversifying your assets and improving occupancy rates.
Future Outlook: The evolving landscape suggests a paradigm shift in the student property market, potentially transitioning from historical equilibrium or surplus to a shortage scenario. Anticipated growth in demand coupled with constrained supply could lead to a student housing crisis.
Implications: Stakeholders in the student property market may need to make strategic adjustments. Students may have to plan ahead and budget for higher rents amid increased demand and rising costs. Agents may experience greater demand but may also need to exert more effort in finding available properties.
Landlords and investors, however, may find opportunities for higher yields, potentially sparking renewed interest in the student property market.
In essence, the changing dynamics signal a significant shift in the student property market, requiring proactive measures from all involved parties to navigate the evolving landscape successfully.
Our team at Graysons Properties is eager to assist investors like you in understanding these shifts in property demand and ensuring that your investments continue to generate the desired returns. Please feel free to reach out to our CEO, Akash, at akash@graysonsproperties.co.uk if you’d like to discuss your assets further.
