Student accommodation will likely retain its upward track for property investment next year. New research reveals that for this year alone, the sector has achieved a record-breaking 30,000 bed spaces extended to the student sector.

These details reveal that the supply of studio rooms has experienced a surge since 2014 as it has doubled since. About 97% of this supply is extended by the private sector for this year based on the data gathered by Cushman and Wakefield.

The rise encompasses a total of 602,000 spaces that were purposely built. The overall rents on a per bed space basis have also seen an increase of 2.9% for school years 2016-2017 and 2017-2018 – a figure that is above the 2.7% figure that was achieved in the previous year.

This shows that the market for student accommodation has indeed experienced sustained health as a whole. Of course, there are some significant variations across the country based on sector and type. For instance, Manchester has the largest population of students outside of London. Here, annual rental for studios increased by a total of 5%. This is despite the fact that there has been an increase of 61% on the number of available studio beds as a result of the tight development restrictions. Meanwhile, in Glasgow, there has been an increase in studio beds by 29% while its annual rents have decreased by a total of 2%.

The private sector has remained as the most expensive type of accommodation in the market. The annual average for rental rates in this sector is at 21% more expensive than those accommodations that are managed by universities. The sector also happens to dominate new development supply. It has delivered a total of 87% of all the new beds that were delivered for the school year 2017-2018. Still, the record for providing the most number of bed space is still held by universities at 57%. All in all, 56% of the market is represented by en-suite bed spaces while 12% is accounted for by studios.

According to Cushman and Wakefield’s advisory associate, David Feeney, it is quite encouraging to see that the market for student accommodation has continued to flourish all this time. This is despite the concerns of the aftermath of the EU referendum as well as the impact of tuition fees to the number of students motivated to go to universities.

He further stated that there is a great opportunity for developers to successfully meet the clamour for accommodations that are more affordable and ones that will provide rooms that are considered as en-suite or standard for students. Value will increasingly become the driving force behind the students’ preferences in terms of their accommodation.

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