‘The explosion of student properties in Liverpool has often been a controversial one – with many recognising the boost it brings to the local economy, but others bemoaning the number of tower blocks being built..
One in every 21 properties in Liverpool is now a student home – one of the highest concentrations of student housing in the country. The boom in student housing is continuing to grow in Liverpool as more student-only properties spread across the city than ever before. There were 10,851 student-only houses and flats in Liverpool at the last count in May 2018.
Liverpool Mayor Joe Anderson said he doesn’t feel things have reached a saturation point yet. He said: “I don’t think we are much different from other core cities – we have lots of surveys that show how much the city needs its student population. Of course we are disappointed that student properties don’t bring any income directly to the council – but the impact students have on the local economy in general is huge.There will come a time when we need to call a halt on things – but I don’t think we have reached saturation point yet.“
Only Exeter, Nottingham, Leicester, Newcastle and Canterbury have more student accommodation in comparison to other properties.
The one in 21 figure does not include halls of residence – dedicated student accommodation that is usually managed by the university or in partnership with a private company.
There were 237 of these across Liverpool in May 2018 – again up from 199 in 2017, but fewer than the 404 halls that were operating in the city in 2019.
That was around 800 more than in May 2017, and is nearly twice as many as the 6,031 counted in May 2009, when the figures first begin.
It’s extremely likely that the number has continued to grow even further in 2019, but the figures are not yet available for this year.
However, the number of halls of residence had dropped from 67,872 in 2017 to 63,995 last year. This shows a move away from university-run accommodation to privately-rented houses and flats – mostly likely because, in a lot of cases, it’s the cheaper option. It’s a situation that also correlates the national trend, which has seen the number of student houses and flats increase while the number of halls has fallen in the last year.’
Three things to consider when investing in student accommodation
Investing in student accommodation
Across the UK, there are 2.3 million people studying at university, and around a third of these live in privately-owned purpose built student accommodation (PBSA). The world of student accommodation is developing. The percentage of students living in PBSA has risen by 8% compared with figures from 5 years ago. Student accommodation has become increasingly prominent for both domestic and foreign investors. The cumulative value of investment in UK PBSA is estimated to have reached £4.5 billion in 2018, marking an increase of more than 10% from the previous 12 months.
But what should investors be considering when looking for a PBSA investment?
Areas of high demand
When thinking about any form of buy-to-let investment, choosing an area that has high demand is key; this will improve an investor’s chances of filling the property and achieving a good yield. There is a sizeable population of potential renters across the country, but an investor must still choose the best city or town.
Places like Liverpool and Newcastle ave been called ‘mature markets’, or “strategic cities containing dual or multiple well-regarded universities, and large numbers of students”. Cities like these vaunt high levels of demand and subsequently high yield.
By the start of the upcoming 2019/20 academic year, approximately 29,000 purpose-built student bedrooms are due to be constructed across the UK. Furthermore, an additional 14,000 bedrooms are currently under construction or in planning for delivery in the 2020 and 2021 academic years, and these numbers are likely to rise. Undoubtedly, the PBSA pipeline is robust and this means there are lucrative new contingencies for off-plan investments.
However, ‘the fundamentals remain key: investors must choose a development in a great location and with a high-quality finish assured. But going off-plan will not only present the chance of a discount on the value of the property; it can also deliver returns during the construction period.’
To find out more about current opportunities and investing in student accommodation, contact CBI property investments.
Purpose-built rental properties fit better into the lives of people more than ever before. They are considered more convenient, allowing renters to move fully furnished properties and providing the freedom should they wish to move to without selling their home first.
The Build to Rent sector fits perfectly into their lifestyle and developers now recognise the need to design projects with young professionals in mind.