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Student accommodation is attracting billions of pounds of investment each year, with the purpose-built student accommodation (PBSA) sector, in particular, growing in popularity.
Student expectations for accommodation have evolved in recent years. Today’s student population is increasingly international, demands quality, purpose-built accommodation, and will pay a premium for it.
Industry research shows that investment in student housing is expected to reach £5.3bn in 2017, up 17% on last year, but demand for accommodation is still outstripping supply.
The overall supply and demand imbalance in PBSA has boosted rents, which are up by 2.55% on average this year, according to industry data, and Cardiff tops the UK table with annual rental growth of 5.8%.
PBSA is also high yielding, typically delivering investors 4.6% compared to 3.3% in the standard buy to let market and some cities have even stronger potential, due to a combination of limited supply and growing student populations.
The UK’s weak currency position is further boosting demand from foreign students – a quarter of the UK’s student population is now from overseas and applications from Chinese students alone have doubled over the last 10 years.
Financing an investment in PBSA – whether it is raising funding for development or refinancing an existing development loan –may be unfamiliar territory for investors, but we work with specialist lenders with a track record of providing bespoke funding solutions and proven expertise in PBSA.
If you are interested in achieving rental yields that outpace traditional residential letting releasing, and would like to work with lenders that could help you to invest in purpose-built student accommodation, please complete the contact form below and we will be happy to help.