UK Housing Crisis Will Push Student Property Demand North

UK Student Accommodation Watching the news last night it made interesting viewing to see the extent of the UK property crisis explained in simple terms.

A third of the UK is now said to be off-limits to low income families says the BBC.

Demand for property in London and the South East of the UK presents a particular problem, even for those on higher incomes.

The gap between supply and demand for property in England is on course to widen to 1.1 million homes by 2022.

While this is a huge social problem for the government to sort out, a small but fast growing sector of the population will almost certainly feel the impact of even modest increases in property prices and rents.

The stereotype of university students living in poor quality cramped housing is slowly becoming a thing of the past, however with housing stock being put under strain more students may be forced either to accept what is available or look elsewhere.

Overseas and even domestic students who now pay higher tuition fees and invest large amounts of money in getting an education are less likely to accept poor quality living conditions than in the past.

The latest idea to ease the crisis put forward by the Times this week is to move students out of private rented accommodation and into purpose built student housing.

The problem with this idea is purpose built student housing is in even shorter supply.

Student numbers are increasing year on year – dramatically when it comes to non-EU applications.

The number of non-EU applicants to UK universities has risen from just under 45,000 in 2009 to nearly 60,000 in 2013. All of them will require somewhere to live.

If there is not enough affordable student housing in their chosen place of study in high demand areas of the south, then many will look to the north of England where student housing is relatively cheaper to rent and supply of housing is less tight.

This may be one reason why applications are down for several London universities and colleges. Applications to the London School of Commerce for example fell 34.8% in 2012. Yet Bradford University saw applications increase on the previous year.

Purpose built student housing is more attractive to students arriving from overseas, particularly in the first year when getting to know a city is an important first step. House hunting in an unfamiliar city can be a daunting prospect when a better alternative is right in front of them.

The opportunity then for buy-to-let investors is to move towards investing in good quality, key ready student accommodation that offers a solid long term return on investment. This is as much driven by demand as it is by students needing somewhere comfortable to live.

What are your views on the future of student buy-to-let? I would love to hear your thoughts.

Kind regards
Loxley McKenzie

Managing Director

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