Manchester’s chronic lack of student beds entices investors
A significant shortfall in the delivery of purpose-built student accommodation in the city, coupled with surging demand, has created “one of the most sought-after real estate markets in the UK”, according to a report from CBRE.
In Manchester, just 4,745 student beds have been delivered since 2018. In that same time frame, demand for beds has grown by 8,100 spaces.
This imbalance makes Manchester one of the most undersupplied major university cities outside of London, according to CBRE.
The consultancy said local planning policy is to blame for a lack of PBSA delivery in Manchester, which has “enforced an effective moratorium on development” of the asset class.
In recent times, the city council has refused three student schemes that it claimed were contrary to Policy H12 – the policy that sets out how and where PBSA should come forward in the city.
These included Fusion’s 534-home project at Deansgate South, which was approved at appeal, and Watkin Jones’s 425 scheme in Fallowfield, which was not.
Manchester now has an identified shortage of 23,186 beds within the city, according to CBRE.
In recent weeks Manchester has opened the door on PBSA somewhat, approving several large schemes, including Vita’s 600-bed House of Social and IQ’s 1,220-bed Echo Street scheme.
The city council has identified a 12,500-bed pipeline and recognises it needs to deliver 750 new bed spaces every year up to 2030.
With the University of Manchester, Manchester Metropolitan University, and the University of Salford all contributing to the rising numbers of students in the city, the opportunity for investors is clear to see.
“The limited supply of new PBSA development in Manchester has captured the attention of investors, creating one of the most sought-after real estate markets in the UK,” said Tom Sinclair, CBRE’s head of residential investment in the North.
“Both developers and investors are actively monitoring new opportunities in the city as they look to secure new PBSA accommodation to meet the surging occupational demand.”
This is not just a Manchester phenomenon. Across the country, major university towns and cities are facing a shortage of more than 350,000 beds, as demand continues to outweigh both the supply and delivery of student accommodation.
“The UK’s student population is the largest it’s ever been, and undergraduate applications are forecast to grow by 25% to one million by 2030,” said Oliver Buckland, head of PBSA transactions at CBRE.
“There’s real opportunity across the country for landowners and developers and we have institutional funds actively seeking opportunities, that satisfy stricter, greener criteria.
He added: “This gap we’re seeing between supply and need for PBSA highlights the mismatch between the pace of delivery and growth in the student population and the chronic need for accommodation. There will be a cost to investors who don’t act now as opportunities are scarce and demand is strong in both the rental and investor markets.”
Can they start developing interesting designs that represent Manchester’s true identity now then? We’re all sick of it
By Anonymous
Least you arent in Leeds where the only accommodation they care about is the ones for students
By Anonymous
There’s not enough accommodation for people who actually live here, put the residents FIRST! Families with children need a place to live before students, only here for a short time, look after the permanent residents first!
By Fazanah Murjahn
While the shortage of beds is an issue I’m glad Manchester has been more cautious about letting too much into the core, which if you believe it’s going to be a thriving commercial and residential space, would come a big opportunity cost. University expansion has probably been one of the most effective levelling up strategies for a range of towns and cities that would have otherwise struggled, but you can see the places where it’s got unbalanced. It’s the student loans program that’s fuelled a lot of it, and you can see that’s becoming a toxic issue over time, so a little bit of me thinks there’s going to be a reset down the line.
By Rich X
But Leeds’s suburbs are booming, there’s no need to live in the centre
By Peter
Oh yeah and Manchester Suburbs happen to be booming too
By Funnilyenough
To those moaning about lack of accomodation for people who live in Manchester. That’s the point – more students in student residencies = less students in private housing = more space for families & childrend and all that good stuff. Protesting against these proposals on that basis is just shortsighted.
However, I would say we need less BTR schemes and more for local sale, and of higher quality – the council needs to step it’s game up.
By Local Resident
Have the places between the University area and Didsbury been repopulated? Or are they still full of tatty to let accommodation,for students? I
By Elephant
@Local Resident, the houses in student areas are NOT fit for families
By CR
Manchester is becoming a dormitory for students. I have noticed that there are very few families and even fewer children living in the centre of Manchester. I agree with the comments above architects continue to churn out the same poor designs – banal boxes. There is a real lack of ambition as far as the architecture is concerned. Developers just want to make a quick return on investment while all the rest of us have to put up with this bland and depressing architecture and we’re sick of it.
By John
Get Fallowfield and Withington turned back into family housing and build better/more affordable student accommodation in the city centre.
By Ray
@CR, looking at approvals for many years around manchester, I would argue that manchester council doesn’t know what is fit for residents. We are talking about accommodation that wouldn’t get approval anywhere in the UK, but gets waved through for development sake. So I agree, in general terms, but things can be converted and retrofitted with some work. If only there was a bit of a will.
By Local Resident