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Student Property Investment
University of the Arts
Student Accommodation Demand
With tuition fee increases set to come into force at universities across the UK from September 2012, investors in student property may be wondering just how their assets will perform, with some concerned that the rising cost of higher education will discourage students from attending university. However, the market for international students remains strong, with such individuals already paying a premium for their course in the UK. Indeed, the recent Spotlight on Student Housing report published by Savills identified foreign scholars as an increasingly important demographic for universities in this country.Stuart Cook, acquisitions manager at Freshstartliving.com, does not believe that investors need to be overly concerned, as long as they have been sensible about the developments they put their money into. He noted that it is important to look for "a property close to the university with good transport links". And he agrees that foreign students will be an ever-growing target market for accommodation developers.He stated that these scholars will "provide a big boost" to the sector when higher fees are introduced next year. "They currently make up around 30 to 40 per cent of the market [according to our own research] and with the amount of foreign students rising each year, they will ensure that the market continues to strengthen and grow," Mr Cook noted. According to UCAS figures, there were over 104,000 international students on undergraduate programmes at the UK's higher education institutions during the last academic year. And the proportion is significantly greater at a postgraduate level, with Universities UK estimating that approximately 40 per cent of those who go on to do postgraduate research are from overseas.In terms of where those from outside the UK go to study, there are universities that stand out for their high levels of international scholars. According to the Complete University Guide, Edinburgh Napier has the highest levels of both EU and non-EU students, with London Metropolitan also attracting significant numbers from these demographics. University of the Arts, London, Manchester and Westminster also stand out for their proportion of international students.A report in the Telegraph back in April this year revealed that many universities are intending to dramatically increase the number of foreign students that enrol, with Durham planning to boost its proportion of overseas scholars by 97 per cent, while Exeter also aims to attract more of this demographic, hoping to achieve a rise of 73 per cent among such students. The need for higher education establishments to improve their books by targeting international students, who are charged considerably more for their course places than their British counterparts, is likely to have a positive impact on accommodation providers.Due to the substantial number of universities in the capital, London is a big centre for scholars from all backgrounds. Savills explained that developments of high-quality student accommodation are needed in the capital. The organisation estimated that there are around 21,500 student beds in the city at present, while approximately 285,000 full-time scholars currently attend one of London's higher education institutions. As a result, the firm believes that there will be a shortfall of over 33,000 beds by 2016.Investors keen to enter the sector may want to look into developments that will be finished in time for the Olympic Games in summer 2012, as this will enable them to capitalise on the "one-off wave of demand" for places to stay that will be created by the sporting event. Savills added: "There will be considerable income for student operators if they can deliver these schemes to meet this demand, especially from the media sector."
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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.