Student housing sector in a class of its own

The region's cities are reaping the benefits of demand outstripping supply when it comes to the student accommodation sector, according to a new report.

King Sturge said the sector had grown to such an extent that it is now recognised as an asset class in its own right by financial institutions and investors.

With student numbers continuing to rise – there were more than 1.43 million in full-time higher education in 2007, an increase of almost 6% on the previous year, demand continues to outstrip supply, with an ongoing shortage of quality student accommodation in city centres.

Manchester, Liverpool and Preston in particular could all benefit from more purpose-built student accommodation.

Manchester is the leading UK student centre outside London, with most recent figures counting 67,710 full-time students studying within the city. Yet the report found that even after taking into account planned private sector projects, 62.5% of full-time students in Manchester were still reliant on the parental home and shared houses due a lack of quality student accommodation stock.

In Liverpool, which has a student population of 36,360, 61% of students were reliant on either shared houses or on living with parents due to a shortage of student accommodation.

Preston has 15,915 full time students and only 3,932 bedrooms in university halls of residence and private sector accommodation; 11,983 (75%) of students live either in shared houses or with their parents.

Conal Newland, a senior associate in King Sturge's UK student accommodation group, said: "This year we have recorded a strong increase in the number of privately developed, purpose-built beds, up by 36% since 2005 to more than 123,5000.

"It is clear that the sector is entering a new phase of university-led development and refurbishment of existing stock, alongside an increased focus on the provision of premium accommodation for overseas students in major European university centres."