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However, levels of purpose-built student accommodation remain low in key UK university cities, increasing investment demand from global buyers.
The UK student property revolution continues.
For the first time, privately-owned purpose-built student accommodation (PBSA) bed spaces in the UK outnumber those provided by universities.
New research from student accommodation search platform StuRents has revealed that the PBSA sector grew 2.6% in 2020, with more than 25,000 new bed spaces entering the market in the UK. That means there are now more privately owned and developed PBSA units across the country than those provided directly by universities for its students.
Over the last 15 years, attitudes towards accommodation amongst students has changed. Older-style university halls of residence are beginning to look increasingly outdated and ill-equipped to meet modern tenant demands. Many students – particularly international students – now want their own living spaces, luxury facilities on-site such as gymnasiums, and an experience only PBSA living can provide.
It comes as demand to study at UK universities has reached record levels. By 30th June 2020, 40.5% of all 18-year-olds in the UK had applied to study at university ahead of the 2020/21 academic year, the highest level on record.
StuRents’ research also highlighted the continued appeal of a UK education from international students – one of the largest tenant markets for purpose-built accommodation. Universities had an 8.8% rise in acceptance rates for international students in September 2020, in comparison to 2019.
However, although the level of PBSA bed spaces now surpasses those provided by universities, there remains a significant undersupply of PBSA across the UK.
In Manchester, for example, there is approximately just 24,000 PBSA units in a city with 90,000 students. While for PBSA in Cardiff, research suggests the city has 2.5 students for every one PBSA property available.
This, combined with the sustained demand for a UK education even during times of wider economic uncertainty, continues to cement PBSA’s place as one of the most popular long-term investments for global buyers.
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