Why Is Investing in Student Accommodation a Good Idea?

In the UK, PBSA occupation rates fell quite considerably in 2020.  

For the academic year 2019/20, around 98% of rooms were occupied in the UK’s largest PBSA operator, Unite. 

In 2020/21, however, this fell to 88%.  

While on the surface, this spells doom, the numbers can be easily explained by students being forced to leave their accommodations and move back home due to lockdown restrictions. 

And judging by the latest UCAS application statistics, the market is set for a considerable bounce back in 2022. 

UCAS has reported a stunning 8.4% rise in university applications for the upcoming academic year – a sign of an expanding market. 

Alongside an 8.4% rise in university applications, there has been a 17.1% growth in applications from non-EU countries. 

This is significant for investors as non-EU students are far more likely to rent in high-quality purpose-built student accommodation, typically because they have wealthy parents. 

There are around 130,000 applications from Chinese students, who are 2.2 times more likely to live in PBSA than UK students. 

Likewise, applications from USA students have increased by over 60%, who are 1.9 times more likely to live in PBSA. 

This increase means PBSA can be an even more lucrative strategy for investors, particularly those focusing on Liverpool and Manchester. 

Both cities located in North West England have a huge Chinese student population, with one in five students in the University of Liverpool being Chinese. 

For that reason, if you are eyeing up the most lucrative opportunities for purpose-built student accommodation, then these two cities are excellent choices. 

You can check out our dedicated guides to student property investment in Liverpool and student property investment in Manchester by clicking the links.

A big factor being the record-breaking growth seen in the UK property market has been a lack of supply. 

A report in September 2021 from Rightmove found that there is currently the hottest ever competition to buy properties, with buyer demand per available property over double pre-pandemic levels. 

This short supply has also been seen in the student property market.  

There are currently around 2.4 million students in the UK, according to UCAS, with a further 500,000 on the way by 2030. 

The UK market is unable to keep up with this demand, with the latest figures suggesting that full-time students outweigh PBSA by 3:1. 

Universities own around 70% of the UK’s PBSA, meaning they are now relying on private investors to help deal with this demand and increase the available supply of high-quality dwellings. 

For this reason, there is an excellent opportunity for investors to make a truly lucrative investment in 2022. 

As mentioned, student appetites for property have changed, with an increasing amount opting for more high-quality furnishings. 

In 2022, many premium student developments come with extra facilities including gymnasiums, security, and even cinema rooms. 

It’s a good bet to invest in a development that supplies these high-quality facilities to ensure you attract as much interest as possible. 

If you want to find and buy student accommodation investments, be sure to click the link to see the latest releases from RWinvest.

To make the most lucrative student property investment as possible, it’s crucial you invest in a city with high student numbers. 

Naturally, the higher the number of students, the more in demand properties will be, which will have a positive impact on your potential returns. 

To identify a student city, it’s a good idea to look at employment opportunities on offer, nightlife experiences, the quality of universities, and the graduate retention rate. 

All these factors together will create a thriving student scene for years to come, which will guarantee the future safety of your investment. 

It’s also a good idea to invest in accommodation that is located nearby to transport links, shops, nightlife, and a university. This will also ensure you generate as much interest as possible.