Demands for student property continues to climb here in the UK, as more investors look towards the stability of the UK property market. Helping boost this is the UK’s continuing economic recovery, with the ONS outlining the countries positive economy results in November, which thanks to higher retail sales, has improved rather than declined. According to official statistics, the GDP expanded by 0.3% which may only seem like a small figure, but in reality, shows the confidence many have in the UK’s economic stability.
According to Property consultant CBRE, from January to September of last year, PBSA outperformed all commercial real estate in the UK. According to its analysis, the segment saw total returns of 7.7 percent in the year ending in September 2023, compared to a total return of -11.1 percent for all of commercial real estate over the same period. According to CBRE, these numbers show how resilient the asset class was to last year's increase in interest rates.
2020 marked the sector's highest point, with an expected value of £4.1 billion. Nevertheless, the market size of the PBSA industry fell by -21% in a single year to £3.2bn in 2021 as the pandemic's effects became apparent. Due to Covid regulations that barred students from pursuing higher education in a physical format, the market size of the PBSA sector shrank to its lowest point since 2016.
Though it is still 4% behind its pre-pandemic peak, the industry has recovered in 2022, with an expected 23% increase in market size. With even more students now applying for university places, purpose-built student accommodation has become a real challenge for developers.
Shared living is still the most popular form of housing for students, but more now choose to live in premium student apartments rather than traditional shared suburban houses. This is due to an increased demand for communal facilities and study spaces. When looking for the correct student investment opportunity, it is essential to take these factors into consideration when selecting your investments.
If you would like to know more about investing in student property, speak to a member of the Elavace team today on: (+44) 0151 433 2906
