9:37 AM, 22nd August 2022, About A year ago 2
Rising numbers of students heading to university, coupled with a slowing supply of new student housing, means that by 2025, the UK will face a shortfall of around 450,000 student beds, research reveals.
According to the latest data from StuRents there is currently a shortage of 207,000 which will not only push rent prices up – but create opportunities for investors too.
They analysed the growth in university enrolments, as well as demand and number of new student schemes being built and calculated that just over 248,000 beds are likely to be delivered between 2017 and 2025 – but there’s an extra 700,000 students that will be needing accommodation.
That means there will be a shortfall of around 450,000 beds.
StuRents says that since 2017, purpose-built student accommodation (PBSA) rents have grown by an average of 3.7% per year.
Over the same period, the country’s largest portal for student accommodation says that HMO rents have risen by an average of 5.1% per year.
And the reason why there is a shortage in the supply of student beds is partly down to the fact that the number of student beds submitted for planning has slowed dramatically over time.
This is also reflected in the number of student beds delivered in the last few years.
Richard Ward, the head of research at StuRents, said: “The squeeze in supply is likely due to multiple factors.
“Planning applications for new purpose-built student accommodation are slowing and low compared to historical levels.
“This is probably down to multiple factors including availability of sites, oversupply in some markets and construction costs.”
He pointed out that councils have also been implementing Article 4 directions, which require landlords to seek planning permission to convert a residential dwelling into a home of multiple occupation (HMO), or a student let.
Mr Ward added: “This could be because councils don’t want to be seen to be allowing landlords to reduce the number of properties available for families.
“Although an Article 4 doesn’t make it impossible for landlords to turn properties into student lets, it does make it harder and creates further barriers to supply growth of student properties.
“The recently announced Renters Reform Bill, which impacts HMOs, could also have a detrimental impact – although the outcome is unclear at this stage.”
Another factor that could worsen the situation is the rising 18-yr-old population.
The number of UK full-time students has been on the rise, despite a decline in the 18-yr-old population.
ONS data indicates this trend for declining numbers of 18-yr-olds is set to reverse – and this will fuel demand further still.
Mr Ward said: “UK higher education continues to remain attractive to foreign students and there is government policy in place to increase the number of international students going forward.
“Both factors suggest strong growth in demand in the future – which will further squeeze supply for students.”
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