Published: 11 March 2019
In the UK, most students begin university life in purpose-built student accommodation, after which many then move into private rental flats, usually sharing with friends. This means that there is continued demand for both PBSA and student-friendly rental flats, especially given the fact that student numbers have been growing consistently for many years now and while they will presumably flatten out at some point, it is highly unlikely that there will be a significant, continuous drop, especially given the growth in knowledge-based industries.
That being so, PBSA could prove a very interesting option for property investors, particularly since it is classed as commercial property and as such its investors are spared many of the regulatory issues associated with standard, residential buy-to-let.
While this could be said of just about any form of property investment, it has particular relevance to the PBSA niche because most students are young adults on very tight budgets, who need to make every last penny count.
While modern students show little inclination to live in the dormitories and shared rooms of old, they do not necessarily want to live in self-contained studios either. Developers have recognised this and are now reducing the number of self-contained studios they build and replacing them with en-suite bedrooms and communal facilities.
While affordability is often cited as the main driving force behind this change, and indeed it may well be a factor, it’s also worth remembering that for many young adults the move to university will be their first experience of living away from the parental home (at least for any length of time) and may also take them away from their established friendship network.
They may therefore find it easier to make this transition as part of a group, even a newly-formed one, than completely on their own. Having said that, there is very likely to be a place for studios in a student accommodation investment strategy, especially for older students (particularly those who want to live as a couple) and for postgraduates, who will have had a chance to come to grips with adult life and also more likely to be focused on research rather than attending classes and study groups.
Generally speaking, students want to minimise the time they have to spend on the practicalities of life so that they can spend as much of their time as possible on studying and enjoying themselves. This means that even though they are looking for value, it is entirely possible that they will be perfectly willing to pay a premium for accommodation which allows them to do this. This means that the best PBSA developments will not only offer convenient access to the main university buildings but also to essential facilities such as supermarkets and laundrettes. It goes without saying the availability of broadband WiFi throughout the building is taken as standard these days.
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