Published: 11 February 2019
The Purpose Built Student Accommodation (PBSA) sector – renowned in the property investment world – is set to reach a total combined value of more than £53 billion in the UK by the end of 2019, say global property consultants Knight Frank.
The student property team at Knight Frank also forecasted that an additional 29,000 purpose built student beds will be delivered up and down the UK throughout the year, which will subsequently bump the total up to a whopping 600,000 student beds in the country across more than 100 universities.
The PSBA scene has long provided both recreational and professional investors alike with a wealth of opportunities from long term capital growth to strong year on year rental growth prospects, making it a sound and popular investment for both local and international property experts.
It is anticipated that in 2019, Asian and North American investors will dominate the Purpose Built Student Accommodation sector in the UK as they have done for many years, with investors from the US, Singapore and Hong Kong also showing a strong interest in the market – even in the face of a potential foreign buyer levy.
Many universities facing financial challenges have more recently chosen to partner with investors in the private sector through on-campus partnerships and nomination agreements which will ultimately reduce competition in the PBSA sector and has in turn, promoted more investors to focus their efforts towards student assets.
The undersupply of student accommodation in the UK has also been a driving factor for the increasing value of the private PSBA sector as universities struggle to provide sufficient housing as student enrolment rates grow year upon year. Paired with ongoing uncertainty and ‘investment threats’ on a global scale, investors are choosing to acquire PBSA assets in the UK which are fundamentally underpinned by the UK’s world-renowned higher education system.
It is predicted that due to underlying market fundaments and a growing student population throughout the UK, the PSBA sector will experience a 2 percent-plus rental growth this year, with investors looking to either further expand their portfolio or invest in student property for the first time after ‘tracking the market for opportunities’.
With the value of the UK’s PSBA sector already witnessing an increase of more than £20 billion since 2014, experts see 2019 as being another year in which the student property sector dominates the market as a whole and continues to achieve record breaking highs.
Investors who choose to take advantage of the Purpose Built Student Accommodation sector stand to enjoy a seriously lucrative return on investment thanks to the demand that is driven ultimately by students choosing to relocate closer to leading education institutions throughout their time in higher education. There are a number of lucrative opportunities that arise when investing in the student property investment sector, most of which are rooted in UK cities that benefit from a growing student population such as Manchester, Birmingham and Nottingham and can earn you a tidy profit.
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