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Purpose-Built Student Housing Demand Rising In UK, Says Knight Frank

LONDON (Alliance News) - The number of students living in private-sector purpose-built student ...

Alliance News 3 February, 2017 | 12:14PM
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LONDON (Alliance News) - The number of students living in private-sector purpose-built student accommodation in the UK has more than doubled since 2007, according to new figures published by property consultant Knight Frank on Friday.

In the academic year 2014/2015, there were 72,000 UK students, or around 6.0% of the student population, living in purpose-built student accommodation, up from 34,000, or 3.0% of the student body, in the 2007/2008 academic year, Knight Frank said.

The property consultant pointed to changing patterns in the Higher Education market, with domestic students demanding the highest-quality university experience given the higher fees paid for education, and international students continuing to enter the market.

The latest data from higher education application processor UCAS showed the number of European Union students placed at UK universities for the 2016/2017 academic year was up nearly 8.0% year-on-year, and the number of international students coming from outside the EU has risen 48% since the 2007/2008 year.

Both of these factors have been highlighted by London-listed student property investors in recent months.

Empiric Student Property late last year cited the removal of an EU student cap in 2015/2016 as the reason demand from European students students spiked and said numbers should continue to rise.

Meanwhile, Watkin Jones told Alliance News it was not seeing as much demand for affordable student properties, as students were "prepared to pay for and want better-quality accommodation".

According to the data from Knight Frank, like-for-like rental growth for en-suite accommodation averaged at around 3.2% across the UK and at around 2.1% for studios in the current academic year.

Average weekly rents for en-suite rooms in private-sector purpose-built student accommodation across the UK has climbed to GBP143 from GBP120 over the last five years, with annual growth in rents and organic growth in the sector driving these increases.

The market for student property is "gathering investors' interest", Knight Frank said. Around 56% of all UK student beds in London in the current academic year are privately owned, and the remaining 44% university owned. In the regions, 40% are privately owned and 60% are owned by universities.

Looking ahead, however, Knight Frank did flag increasing competition from international universities and voiced some concern over international student numbers if immigration policies are tightened.

However, "all UK core university cities remain structurally under-supplied. The delivery pipeline in cities such as London and Manchester is small and this structural imbalance is likely to remain", Knight Frank added.

By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Empiric Student Property Ord 82.75 GBX -0.60 -
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