One of the messages emerging from Property Week’s ninth Student Accommodation conference was that Brexit could well affect student numbers in 2017. Released was research showing that, at the start of the 2016/17 academic year, almost 522,000 students were enrolled on undergraduate courses at UK universities, an increase of more than 7,000 on 2015. Furthermore, the number of EU students accepted into UK universities rose by 8% year on year.
The problem remains that much of the impact of leaving the European Union is still very much unknown. The government’s frustrating policy of not releasing any kind of strategy so far has concerned many who believe that a huge drop in confidence could see EU student numbers drop, possibly dramatically.
In order to counter this, experts are advising prospective and existing student property landlords to look for value in well-established cities such as Nottingham, Manchester and York.
The key for investors is to seek long term stability. This can be found in developments that are offering ‘future proofed’ facilities such as strong broadband connections and study spaces that offer more than budget furnishings. Students, increasingly, are moving away from party lifestyles as the cost of studying increases and landlords are advised to seek out accommodation which provides sufficient space for this.
Similarly, there is still value and profit to be sought from emerging areas such as Bolton, where the cost of studying is comparatively cheap. Students will seek value for money in a stalling economy and investors with their fingers on the pulse can seek emerging institutions that offer low living costs as an indicator of possibly increasing future popularity.
One of the key note speakers at the event, Paul Humphreys the founder of student review site StudentCrowd, said that mid-market halls were the least popular with students. Accommodation which cost between £98 and £135 a week, outside London, was the worst reviewed on a number of measures on his site, based on value for money, social experience and management, he said.
The cheapest halls, costing less than £97 per week, were predictably best value for money, but less obviously were also voted best for social experience, with an average of 4.2 out of 5.
The most expensive halls, at more than £135 per week, were also rated surprisingly highly for value for money, scoring an average of 3.8 out of 5 – a higher rating than halls which cost a lot less.
This should be taken by landlords as an indication that location and social experience still rank highly for prospective tenants. Cities such as Manchester and Nottingham offer the night life, restaurants and facilities that student’s value as part of their studying experience.
Despite moving away from a hedonistic lifestyle it is still true that students need space to socialise, to have fun and to relax. Facilities within their accommodation aren’t everything, and this is evidence that when seeking potential investments landlords should think of the surrounding areas.
Cities such as Manchester are tempting, but also areas such as Bolton with strong transport links within a manageable distance can represent sound investment. Using Bolton as an example, there are good bus and train routes in to Manchester city centre but, in lying outside of the city centre district, the living costs are much lower.
A panel of international students told the conference that they were happy to live in smaller rooms if they paid less. The message seems to be that facilities and location are important, size of actual bedrooms less so.
2017 is set to be a big year for student landlords and we can expect shifting trends in what students want and expect. As the demographics of tenants seems sure to change, so too must the expectations of landlords. Staying ahead of the curve will be necessary and may take more time and research but properly researched investment will be a reward worth the work.