The higher education market is defined in many ways by how much everything costs and who pays for it. Before the introduction of tuition fees in September 1998 by Tony Blair’s Labour government of the time, higher education was free to all. The state paid costs in recognition of the fact that an educated populace is a public good and beneficial for all. Since then however, the debt burden has fallen on the students themselves.
The amount of money that students have to pay for their tuition has gradually increased over the years and now stands at £3,225 a year, and that is before we consider the scrapping of maintenance grants which helped lower income students. It is not really much of a surprise to learn that UK students are amongst the most debt ridden in the world.
A report has been released which confirms the massive extent of student debt in the UK. To the end of March, figures confirm that the total has broken the £100bn barrier for the first time. This represents an increase of 16.6% over the previous year and a huge rise of more than 50% since the cap of £9,000 was introduced in 2012 by the Conservative-led coalition government. The average student in 2017 leaves university with a debt of more than £32,000.
With costs reaching such stratospheric levels it is no surprise that students are looking for the best possible value for money in their university experience. Websites like Student Beans and Student Money Saver which provide discounts and offers have become not only increasingly popular over the years, but actually a necessary part of university life for many students who would otherwise have severe financial issues.
This attitude towards saving money also extends to accommodation. Traditional university halls of residence have become very expensive in recent years as universities try to make the most of their assets and increase their funds in an age of austerity. Unfortunately, these old-style university halls are often substandard and cannot possibly live up to the price tag which has been placed on them.
It is safe to say that students have noticed.
The increasing popularity of Purpose-Built Student Accommodation (PBSA) in recent years is not a coincidence. If the traditional university halls are providing sub-standard living conditions for the same price as a PBSA development which comes with state of the art facilities such as an on-site gymnasium, super-fast WiFi, a cinema room and a concierge service, then there isn’t really any competition in the eyes of a potential tenant.
PBSA developments are proliferating at speed and are becoming increasingly accepted as the best option among the UK student body. Property investors are also looking more and more closely at student accommodation as a viable investment sector, with new developments garnering interest from all over the world. The sector is worth billions every year and analysis from Savills suggest that it will keep growing in the years to come.
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