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Rental growth soaring in purpose-built student accommodation
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
There has been a substantial rise in the number of students residing in the private rental sector during recent years. Moreover, the number of academics living in private sector purpose-built student accommodation in Britain has also risen significantly.
Recent figures provided by Knight Frank indicate that the number of students living in these purpose-built properties has more than doubled during the last ten years. As such, it is one of the few asset classes to deliver positive rental growth in every year during the last decade.
Rents
The average weekly rent for en-suite accommodation in Britain has risen from £120 to £143 in the last five years. This growth has been underpinned by an annual rise in rents, alongside the organic growth being seen in the sector.
This growth includes the introduction of higher-spec student accommodation into the market, which goes a long way in explaining why the student property market remains attractive to investors.
At present, the private sector purpose-built student accommodation market is included of assets totalling an estimated value of £42.3bn. This includes both private sector and university maintained accommodation of this nature.
Based on the present level of investment and construction activity in the sector, this figure is expected to grow to £50bn by 2020.
Rental growth soaring in purpose-built student accommodation
Development
James Pullan, head of student property at Knight Frank, observed: ‘The importance of higher education remains unaffected by the tumult of economic cycles.’[1]
This news comes after a new purpose-built student accommodation development in Sheffield was approved last week.
The accommodation, entitled Steel City, is set to cost around £20million pounds and will be situated next to the University of Sheffield’s Engineering Faculty.
Speaking on the development, Andrew Southern, chief executive of Southern Grove (who are leading the project), noted: ‘Securing planning permission for this scheme will enable us to create an exciting development that will break away from the traditional concept of student halls of residence. We are working in close collaboration with Axis Architecture, the masterminds behind this striking building and with Steel City we’ve put together a high-quality redevelopment that stiches a modern twist back into the traditional 19th century fabric of that area.’[2]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/2/purpose-built-student-accommodation-continues-to-deliver-positive-rental-growth
[2] https://www.propertyinvestortoday.co.uk/breaking-news/2017/1/plans-approved-for-20m-sheffield-development
