The huge disruption of the Coronavirus crisis to the UK’s university education does not alter the sector’s long-term fundamentals, a specialist lettings platform insists.
Richard Ward, head of research at StuRents, says: “The HMO market has been largely insulated from the pandemic due to its early lettings cycle, whilst Purpose Built Student Accommodation has faced challenges due to travel restrictions and the uncertain conditions facing students due to COVID-19.
“However, as shown by the last recession, demand is likely to remain strong as students look to invest more and more in their education when faced with a difficult jobs market.
“Yet, with demand greater for higher tariff institutions, we are seeing a widening multi-tiered market and thus investors’ interests are still being piqued by the very best locations at renowned institutions.
“Nevertheless, the suitability of an investment should not hinge on broad market analysis or institutional reputation alone, with sophisticated investors starting to realise they must evaluate the granular, local conditions to ensure an appropriate product fit, rather than relying on national trends” he concludes.
Ward reports that the Purpose-Built Student Accommodation Sector has seen a net increase of 2.6 per cent in 2020 with more than 25,000 new beds coming to the UK market.
This means the number of private PBSA beds on offer has now surpassed university supplied accommodation for the first time.
StuRents claims the sector’s resilience is buoyed by the long-term demand for student accommodation: according to data from UCAS, a record-breaking 40 per cent of all 18-year olds in the UK submitted an application to study at UK universities this year.
Additionally, a projected increase in the 18-year old population over the next decade of 176,000 means demand for UK higher education will continue to grow.
It also says that despite the near-term uncertainty around Brexit and Covid-19, the appeal of UK universities to international students outside of the EU isn’t abating, resulting in an 8.8 per cent rise in acceptances this year compared to 2019.
This post has originally been featured in Letting Agent Today.