A recent survey showed 76% of students living in purpose-built student accommodation (PBSA) or university-run housing said they were happy with their rental choice.
The first Student Accommodation Survey was compiled by Knight Frank in collaboration with UCAS between May and August 2018. The survey includes opinions of more than 70,000 British and international students, the biggest survey of its kind in the UK.
A rise in purpose-built student accommodation
Across the UK, 30% of full-time first-year undergraduate students live in privately-owned PBSA, which is up by 22% compared to five years ago. Overall students are satisfied with their PBSA. The highest level of happiness among students renting was those living in these types of accommodation or university halls. Additionally, 69% of students renting PBSA’s would recommend it to new first-year students.
James Pullan, the head of Global Student Property at Knight Frank, said: “The private sector now accounts for the majority of new PBSA development, and, as universities become more reliant on outside investment to provide new PBSA, greater focus is likely to be placed on the strength of the relationship between the private sector and universities.”
Location, location, location
With location being the top influence for how happy students are with their accommodation, location is also the most influential element to achieve the best rental yields when investing in buy-to-let properties, especially for student accommodation.
Manchester, which was named the best place to be a landlord in the UK, is often listed as a top city for high rental yields among student properties. The city also boasts 77% of students feeling happy with their accommodation choice. Out of UK university cities, Manchester students are the 10th happiest with their rentals. Two other northern cities made the top 10 list with 84% of students in Liverpool feeling happy with their rental choice and 80% in Leeds, which are above the UK average of 76%.
For landlords and investors interested in student accommodation, it’s important to look at what students want, including the amenities they are willing to pay for and when they want to secure accommodation for the next academic year. For example, the largest percentage of students said they would pay a premium for fast WiFi, a larger bedroom, on-site gym, and 24-hour security.
Additionally, 57% of second and third-year students secured accommodation for the following academic year by the end of March. It’s important for landlords and investors to keep this in mind, especially as new research shows many students want to secure accommodation almost a year in advance.
Students are becoming landlords too
There are even opportunities for students to become homeowners and landlords. A buy-for-university mortgage allows students to borrow up to 100% of the value of a property with specific conditions involving their parents. The student can then rent the spare rooms, and after graduation, the mortgage turns into a traditional one and frees the parents from financial liability.
With studnt numbers increasing in certain areas of the UK, university towns boast strong rental demand. Investing in student accommodation in these regions can produce healthy yields, making lucrative investment opportunities for students, landlords, and investors.