March 10th, 2017Student Accommodation News
The growth in student property has been staggering. According to a 2016 Knight Frank report, the Purpose-Built Student Accommodation (PBSA) investment market had a record year with £5.1bn of transactions. Of the 49,271 student bedrooms transacted, over 46% were acquired by large scale investors. The North West, for example, saw 6,524 student beds bought over the year. Despite this record and staggering growth, a massive 64% of students in Manchester, and 60% in Leeds and Sheffield, are still unable to gain access to quality student accommodation.
It seems that there will be no downturn in either the demand or supply of student accommodation. Profits are on the increase too, with no slowdown predicted for this either - rental income increased by more than 3% in the last published report, with similar rises predicted in the near and medium-term future.
There does seem to be one large problem with many of these developments though, and that is opposition from local residents. A quick Google search for ‘Student property’ returns two articles in the top 5 results from local newspapers the Liverpool Echo and the Huddersfield Examiner, asking the question ‘do we need more student accommodation?’.
The crux of the argument coming from those in the regions which have seen the most growth seems to be that city centres and surrounding areas are quickly becoming dominated by student properties, sometimes changing the landscape in a very short space of time. The local housing market can be affected as a large majority of houses for sale or lease are snapped up by students or student landlords. Family housing is then struggling to keep up with demand as its supply is eaten into by a growing local student population. There are also those who argue that areas like Fallowfield in Manchester have become unsuited to family living with the student lifestyle changing the area irreversibly. Local economies are shifted towards student provision such as bars, low cost food outlets and entertainment venues. It is argued that places like these have become too loud, too noisy and don’t have enough amenities for families and non-students.
There is some truth to these arguments, but they fail to take into account the intricacies of the issue. The argument that new student developments change the landscape is one with merit and it could absolutely be argued that developers seeking out new opportunities should take the history and culture of an area into account before submitting plans, and should additionally consult with the local population much more.
In terms of family housing stock being unfairly reduced due to student landlords, this is an argument that warrants scrutiny as terraced and other housing that is developed into a HMO (House of Multiple Occupation) is often purchased by individual or small landlords who are unregulated. Once the property has been developed in to a HMO it is then difficult to revert back, and landlords who run these properties often fail to take complaints about tenants seriously and can often be running unsafe or uninhabitable accommodation.
Complaints about student life are much easier to combat as vibrant areas like Fallowfield, whilst likely to have more buzz than sleepier suburban areas, contribute much to the local economy and atmosphere. Furthermore, lazy assumptions about students should be rejected as a majority do not live up to stereotypes of all night partying and loud behaviour.
Ironically it seems that targeted and specifically designed student housing, mainly developed in city centres, is the answer to the issues facing many city-centre universities. Speaking to the Liverpool Echo, a Liverpool John Moores University spokeswoman said: “As a predominantly city-based university, we want our students to enjoy the fantastic life that Liverpool offers them and that attracts them here. We carefully select accommodation providers to offer students a range of options that are high quality, safe and value-for-money. Our city centre accommodation enables students to live, work and study in the heart of Liverpool and make the most of the culture, arts and entertainment that surrounds them. This in turn brings economic benefit to the region and helps give the city the vibrant and positive reputation it enjoys as a world-class student destination.”
Whilst it can be a tricky and thorny subject, developers would do well to keep local residents in mind when proposing new developments as it seems that the continual development of more and more student accommodation might create some friction.
Student accommodation in the city centre close to the local universities is always popular with tenants. Have a look at our available investment opportunities today!