Investment Trends Reveal Record Demand For Purpose Built Student Accommodation
We have some exciting new student buy to let deals available for 2023! Don't miss out and secure the best student investment properties now before units sell out.
In exciting news for investors, statistics show that international students are returning to UK universities in record-breaking figures following a sharp decline amidst the COVID-19 crisis.
This means that demand for student accommodation has also soared – and subsequently a huge supply-demand imbalance has occurred as a result.
Investment trends have shown that this is not just isolated to the UK either – real estate company JLL have highlighted £14.4 billion was invested worldwide into purpose-built student accommodation last year alone.
This is the second highest rate of investment in the student sector for the past 15 years and is much needed – especially with reports last year of the University of Glasgow attempting to lessen its intake as there was not enough student accommodation available to house its students.
It is no wonder then that investors be drawn towards investing in student accommodation in the UK, as there is a potential for great gains to be made owing to the increased demand for student property.
International Student Resurgence
The shortfalls in student accommodation have been especially detrimental to international students – those coming from countries with a weaker currency have found accommodation increasingly unaffordable, for example.
Yet in 2022 – the UK issued nearly 500,000 study visa grants for international students – this marks an impressive 81% rise when compared to pre-pandemic figures.
Indian nationals enrolled into UK universities saw a 307% surge (105,278) compared to pre-COVID 2019 figures (34,261).
Whilst the intake of Chinese students tapered down slightly – there has also been a significant rise in students coming from other countries such as Nigeria and Bangladesh.
However, it is forecast that Chinese international students will again rise in numbers due to China’s recent loosening of their COVID restrictions.
A recent survey conducted by Erudera has even highlighted how 64% of respondents do not support restrictions placed on international students and believe they should either increase or at least remain the same.
This is a positive for any would-be investors interested in student accommodation as it ensures that there is potential for long-term gains for the foreseeable future.
This seems to be reflected in further data from JLL too who have highlighted the overall global share of investment into the ‘living sectors’ has seen a 17% rise since 2010.
Shortfall of Beds
Perhaps one of the most significant pieces of data comes from StuRents who have forecast that by 2025 there will be a 217% increase in the shortage of beds available for students when compared to 2022 figures.
With an estimated 450,000 shortfall predicted in the next 2 years, investors should be keen to capitalise on these market figures to meet the supply-demand imbalance and ensure a steady stream of income.
It is also worth noting that admissions to UK universities as a whole hit an all-time high in 2022 – which runs alongside the demographic increase of 18-year-olds which is set to increase year-by-year till 2030.
As such, this will ensure that demand will remain consistently high as more and more student beds will be necessary, and as rents are forecast to rise further investors will be drawn to the attractive yield profile and benefit from the ongoing undersupply of student housing.
In turn, investors may also do well to diversify their property investment strategy when it comes to student property.
The growing student intake may offer a heightened demand for such a change in accommodation which will keep demand high over the next few years.
As the supply-demand imbalance for student accommodation is only set to swell owing to an ongoing growing student intake, there is a real potential for lucrative gains when contrasted with other forms of real estate.
At RWInvest, we pride ourselves on our extensive portfolio of successfully completed developments, and with over 18 years of industry experience we have become one of the UK’s leading property investment companies.
If you’re keen to explore investing in student property then why not consult our in-depth guide and take a look at our current offering of purpose-built student accommodation units that are available by clicking here.
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