Student property sees 37% value increase since 2014.
The positive news just keeps on coming for the UK’s student accommodation market. Knight Frank recently reported that the market’s value has risen by approximately 37% in the years 2014-2017, from £30.9bn to around £42.5bn; with official forecasts now predicting that this figure will reach £45bn by the end of the year.
As the market’s value grows, student property continues to be a popular choice for shrewd property investors seeking to diversify their portfolio. Last year, CBRE reported that UK student property had generated £3bn in transactions throughout 2016, making it the second biggest year on record. According to Property Investor Today, student accommodation routinely outperforms traditional property assets and has been the UK’s strongest growing property investment sector since 2011.
Rachel Pengilley, partner in the Knight Frank Student Property Team, said: ‘as our sector continues to mature, and becomes increasingly recognised for its resilience in uncertain times, we anticipate continued appetite from global capital next year. As we look to 2017, rental growth, strong demand from domestic and international students and a healthy development pipeline are set to be the defining factors in the sector’s success.’
Ms Pengilley’s comments seem to support the longstanding belief that the success of the market is based largely in the UK’s excellent worldwide reputation for education. The number of students entering the higher education system, both from the UK and overseas, has grown consistently in the past few years. UCAS recently reported that the number of applicants had increased 3% year on year – now reaching a record high, with approximately 493,000 students placed for the 2016/17 academic year.
These rising student numbers have meant increased demand for purpose built student accommodation. Alongside rising student numbers, increases to tuition fees introduced in 2012 have created a much greater expectation of quality amongst the student population; drastically increasing demand for high quality Purpose Built Student Accommodation.
Cormorant House, Huddersfield
Our newest student property development, Cormorant House comprises 168 luxury student apartments within the town of Huddersfield.
The development will offer students a spacious living environment, high quality finishes, generous communal spaces and a variety of facilities; all in an area of significant and rising demand.
An exciting investment proposition, investors receive 9% NET returns p.a. for five years, with zero ongoing maintenance or management costs.
Huddersfield is currently the 10th largest town in the UK, with a student population of approximately 48,000 students, attending four major educational institutions. As Huddersfield’s student population grows, demand for high quality purpose built student accommodation developments like Cormorant House looks set to skyrocket.