New research from industry experts shows that demand for Purpose Built Student Accommodation (PBSA) is rapidly on the rise.
Initially reported in The Residential Landlord, The Mistoria Group has found that demand is on the rise as the number of students attending university in Liverpool is on the up. 60,000 students came to the city for university last year, a figure up 20 per cent year on year. This is then expected to rise again. It is estimated that 60% of these students will require accommodation.
In quotes carried by the same article, Managing Director of The Mistoria Group, Mish Liyanage, explained: ‘There is a very real shortage of quality student accommodation in Liverpool and demand is consistently outstripping supply. The number of student rooms has swelled over the last five years, but there still remains a shortfall. We have seen a surge in students looking for high quality, HMO accommodation with close proximity to the universities and occupancy across our student accommodation is at 98%. Shared student accommodation in Liverpool gives investors excellent yields. There are many areas of Liverpool that are ideal for student property investment such as Kensington, Wavertree, Toxteth, Kensington Fields.’
He continued: ‘Student property is the fastest growing sector of the market, giving investors strong returns that are well ahead of standard BTL. The growing numbers of student tenants in Liverpool are driving demand for quality accommodation in the city and this is likely to be a long term trend.’
This echoes much of what we have written here, noting with interest the almost exponential rise in demand from students and relative lack of appropriate stock to meet those needs.
Looking further out across the UK, the picture looks very much the same. A report released by Cambridge University, for Cambridge City Council, sought to find out the number of students seeking accommodation and the number of available rooms.
In its findings it stated that both universities in the city, Cambridge and Anglia Ruskin, had a total of more than 49,000 in 2015/2016. With calculated rises in demand, the report estimates that a total of 8,959 student rooms would need to be built in the PBSA sector by 2026 if both the current and the future potential levels of student accommodation were to be met.
And it is easy to see how these numbers translate across the country. Cities like Manchester, Liverpool, Glasgow, Edinburgh and Nottingham have struggled for years with a chronic undersupply of quality student housing. In support of this Cushman and Wakefield released a report last year which estimated that for 1.7 million students across the UK there was a supply of just 568,000 PBSA beds, representing a huge shortfall.
It’s certainly concerning that in a sector that sees chronic undersupply many developers still face a lot of reluctance from planning committees and residents when looking for new land to develop.
As any PBSA landlord will attest to, there is money to be made from PBSA and investment into new projects certainly isn’t difficult to come by. Certainly there is also a mass of investors keen in existing PBSA properties.
We can only hope that as these trends continue many planning committees, councils and the government wake up to the need for a huge increase in PBSA provision.
If you’re looking to invest in PBSA contact us today to speak to one of our experience sales consultants!