Unite New Wakefield Street
Unite's New Wakefield Street plan

Student boom shows no sign of slowing, says Cushmans

The boom in student accommodation schemes hit new levels in 2017, according to Cushman & Wakefield, with the consultancy reporting that 30,000 bed spaces were delivered nationally in the year.

C&W’s UK Student Accommodation Report 2017/18 studies the market across the UK, including demand and supply of new developments. While the numbers of newly delivered en-suite and studio spaces have both increased significantly, the supply of more expensive studio rooms has increased by 106% since 2014 – almost all of them developed by private sector developers.

Overall rents per bed space in student accommodation increased 2.9% between academic years 2016/17 and 2017/18, marginally above the 2.7% seen during the same period in the previous year.

Following the EU referendum, there was a 2% drop-off in EU students, but the weak pound was thought to have contributed to a 5% climb in non-EU students.

Manchester

Manchester, which is home to 23,578 purpose-built student accommodation bed spaces, has the UK’s second largest student market and has seen a 20% increase in students from outside the UK over the last five years, said C&W.

The total volume of purpose-built student accommodation in the city centre is still limited, contributing to headline rental growth ahead of the national average, with en-suite prices up by 3% and studio rents up by 5% on the previous year. There is a degree of reliance by the universities on the private sector to absorb demand, with nearly 4,000 private sector beds in nomination agreements with the two universities.

C&W said that overall accommodation quality in the city has slipped behind that of other major UK cities, adding that forthcoming developments such as Unite’s 30-storey 573-bed strong development at New Wakefield Street and Empiric Student Property’s redevelopment of Victoria Point will help improve quality.

Liverpool

For the start of the 2017-2018 academic year, the supply of purpose-built student accommodation bed spaces in Liverpool stood at 17,080. Of these, 1,844 of these beds were new for the current academic year, with nearly two thirds of these en-suite.

At £135 per week, the average price of a new en-suite bed space in Liverpool is almost 10% lower than the average new bed space price nationwide. This relative value has been successful in drawing students out of inexpensive, old private housing. Cushmans said that quality products have been particularly successful in attracting non-UK students, the total number of which have grown by 97% over the last five years at the University of Liverpool alone.

Over the last three years, over 5,800 bed spaces have been brought to the market in Liverpool, increasing total supply by 50%. Increased competition means that rental increases have slowed to 1% and 2% for en-suite beds and studios respectively.

New developments in 2017/18 include the 776-bed space St Luke’s View operated by UNITE, while the University of Liverpool has opened 489 bed spaces in its new Greenbank Student Village.

Comment

David Feeney, advisory associate at Cushman & Wakefield, said: “It is encouraging that the student accommodation market continues to flourish despite initial concerns following the EU referendum and the impact of increased student tuition fees.

“However, in a number of cases studio development has been driven by higher prices rather than by true student demand, which now risks oversupply. En-suites and shared rooms provide a cheaper bed and more of a social experience, with communal and shared spaces.

“There is a real opportunity for developers to meet the demand for more affordable accommodation and provide more standard or en-suite rooms for students. Studios are 45% more expensive but do they offer a 45% better experience? It is all about the value of the experience and this will increasingly drive students’ preferences for accommodation.”

Feeney concluded: “The UK is still a global education hub, attracting the best students from around the world. In funding terms, foreign students have a much greater impact on the income profile of UK universities, making up 26% of all tuition fee income.

“It is clear that the UK remains a highly attractive place for students to come. The sector will continue to prove attractive to investors and if developers are able to meet student demand for en-suite rooms, rising student numbers will provide suitable and reliable returns.”

The full report is available online.

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There must be a couple of thousand more under construction in Liverpool at present, at Lime Street, Skelhorn Street, and a whole row down Islington etc: It certainly is changing the face of Liverpool in many areas and becoming a large and widespread industry

By Man on bicycle

Preston is awash with purpose built student accommodation with more coming on stream. Room rates and occupancy rates are not great.

By Anon

Hollowing out the city centres for a quick quid. Poorly designed, poorly built, trash.

By Jonty

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