Purpose Built Student Accommodation Is A Profitable UK Investment

What is Purpose Built Student Accommodation?

PBSA developments are designed to be built for the specific needs of students. They include a variety of facilities such as games rooms and gyms for the perfect balance of studying and socialising. They are located in prime areas that are close to the campus as well as city centres and local amenities.

Student Numbers In The UK Are Soaring

In 2015 UK universities removed the intake cap, allowing more students to be accepted onto any course, seeing a record 540,000 students enrolled in 2015/16 according to UCAS. This is the 3rd consecutive year that student numbers have been rising.

There has also been a rise in international students, which means that many overseas students (EU and non-EU) are attending UK universities. These overseas students are more likely to spend a bit more on rent for a PBSA.

The Undersupply of Student Accommodation

With record student numbers comes a higher demand for student housing. There is a critical undersupply of PBSA in the UK, which is why many investors are spending their capital on this asset class. Although the residential market has temporarily filled this gap in the supply and demand chain, only 26% of students across the UK have access to PBSA rooms.

Universities as a result have an acute accommodation shortage, causing housing laws to funnel students into PBSA. This is a great indicator for a profitable property investment.

purpose built student accommodation

PBSA Is The UK’s Best Preforming Property Asset

PBSA quickly became the UK’s leading property investment sector because it is a dependable asset that is recession-proof and assured. Because student rents have increased by 3% annually over the last 15 years, the investment promises high yields.

PBSA was voted the World Class Asset by the Wall Street Journal because:

  • It has a £6.5 billion expenditure (2015)
  • It is a top performing asset in the UK for returns (JLL)
  • The UK student property market was valued at £200 billion

A Professional Onsite Management Guarantees Easy Income

PBSA comes with onsite management, making the investment hands-free, ideal for overseas investors and busy landlords. The management sustains both occupancy levels and conducts maintenance so you don’t have to.

Investors will receive a true net income because management costs are factored into the fixed yield contracts. This is especially attractive compared to traditional student buy-to-lets and HMO’s. You don’t need to stress over sourcing tenants, collecting rents, dealing with late payments, ongoing maintenance and unforeseen costs because the management company will deal with landlord responsibilities for you.