Will the UK’s student housing sector struggle with rising demand?
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Will the UK’s student housing sector struggle with rising demand?

Will the UK’s student housing sector struggle with rising demand?

The UK Student Accommodation Report 2019/20 by global commercial real estate services company Cushman & Wakefield has revealed a rising demand for purpose-built student accommodation (PBSA) in the UK.

Led by two partners at Cushman & Wakefield, David Feeney and George Dyer, the recent report showcases the pressing demand for student accommodation in the UK and highlights how this demand continues to rise around 30 percent faster than the number of bed spaces developed.

“2019 has been another strong year for the UK student accommodation market, with demand growth continuing to outstrip supply at a national level and 32,000 new bed spaces delivering a new level of quality stock to the market – enhancing the student experience,” they note.

Nearly nine out of ten (87 percent) of all new beds are delivered by private sector providers, the joint highest proportion on record, according the report. More than one-third have been delivered in the West Midlands and North West of England.

In the pipeline are another 114,000 bed spaces, of which two-thirds have full planning approval.

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Nearly nine out of ten (87 percent) of all new beds in UK’s PBSA are delivered by private sector providers. Source: Lewis Parsons/ Unsplash

“The UK continues to attract an increasing number of international students – an important factor as the market reaches the nadir of the UK 18-year-old population. The gravitation of students towards institutions of quality and with strong employability records is now entrenched and emerging evidence for 2020 shows continued application growth to the best universities.

“The ability of successful institutions to increase income and invest to stay ahead is likely to accelerate these trends over coming years,” wrote Feeney and Dyer in the report.

Nationally, the demand pool for bed spaces continues to rise at a faster rate than the number of new bed spaces delivered.

This trend is expected to continue. International students is a key part of this, the report said, surpassing the uncertainty caused by the country’s political climate on the country’s real estate market.

“The UK is an attractive place to study, with a high standard of universities, relative affordability of
degrees and our student visa policy now in line with Australia and America. These factors will
continue to support the market, making PBSA a key counter-cyclical investment class,” the report said.

In the past decade, international enrollment from outside the EU has steadily increased. In 2008/09 there were 249,185 non-EU students. This has since increased to 319,340 non-EU international students in 2017/18.

Accounting for 19.6 percent of the total student population in the UK, nearly one in five students in UK universities today are from abroad. At the postgraduate level, more than one in three students were international. China, India, the US, Hong Kong and Malaysia are the top five sending countries for international students in the UK.

The recent Open Doors 2019 report, published by the International Institute of Education (IIE) and the US Department’s Bureau of Educational and Cultural Affairs (ECA), also showed that the UK was the top study abroad destination for US-based students in 2017/18.

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