While there has been a shortage of all types of rental accommodation across the UK for several years now, the student market has been hit particularly hard.
Research from StuRents suggests that there is currently a shortfall of over 200,000 beds, which is expected to grow to around 450,000 by 2025, thanks to rising student numbers and a slowing in the supply of new student housing. Although delivery was increasing up to 2019, the pandemic hit the industry hard, with around 22,000 new beds delivered in 2021 and just 15,000 in 2022:
Richard Ward, Head of Research at StuRents commented in August 2022, “The squeeze in supply is likely due to multiple factors. Planning applications for new purpose-built student accommodation (PBSA) are slowing and low compared to historical levels. This is probably down to multiple factors including availability of sites, oversupply in some markets and construction costs.”
A National Student Accommodation survey, published by Save the Student in February, revealed that 50% of students surveyed are worried about the housing shortage. One student in private halls said, “I have been lucky enough to extend my tenancy for the next year, but I've been on the phone with friends in other cities having panic attacks because houses they apply for keep getting bought out and they're scared they're going to have to drop out.”
Which locations are particularly struggling?
Manchester is one of the hardest hit student cities, with a shortfall of around 4,000 beds for the current academic year. Students enrolling at Manchester University back in September 2022 were being offered £2,500 to live off-campus, with contingency accommodation secured in Preston and Liverpool.
Elsewhere, some of those studying in Bristol were expected to travel from as far away as Cardiff, while the University of Glasgow was telling new students that it could not guarantee them accommodation and that anyone living within commuting distance would be automatically rejected for a place in halls.
In Durham, hundreds of students queued outside letting agents overnight at the end of October last year, in order to secure accommodation for the 2023/24 academic year when it was released, with some signing contracts without even viewing the property. A local letting agent explained, “Durham council will only let around 10% of houses in a certain area be converted into student housing – so we have run out of properties.”
A real opportunity for landlords
While more purpose-built student accommodation is certainly required to house first-year undergraduates, there’s also a huge need for more private rented housing. This presents a real opportunity for landlords to invest in HMOs for students. If you haven’t considered this type of rental, here are three reasons why student HMOs can be a great investment:
To find out about student demand in your area and discuss what investment opportunities there may be for landlords, just get in touch with your local branch and one of the team will be very happy to help.
Looking for advice?
If you're looking to let or sell your property, we can help. Get in touch with your local branch or book in for a property valuation.