As a property investor it is vital to look for the next trends and explore new markets. One of the most popular new markets to be aware of is luxury student accommodation.
If you have an inward groan when you hear the word student accommodation, you will be pleased to discover that 21stcentury students have far higher expectations than decades past. This unique asset class is proving to be robust, in serious demand and an affordable way to diversify your portfolio.
Luxury really does mean luxury. Some new developments feature on site gyms, a 24-hour concierge service and free coffee from an artisan barista downstairs. Stylish modern décor, glitzy chandeliers and landscaped gardens provide students with a stunning living experience that they are prepared to pay a premium for. These luxury developments cater for everything a student could possibly want, with private cinemas, plush karaoke rooms and even a theatre.
The demand is there too, students are flocking to these luxury apartments and studios. The number of students living in Purpose Built Student Accommodation has risen from around 46,000 in 2007 to 102,000 in 2015.
Students are steering away from dingy house shares, preferring their own space as well as access to high end features. Student numbers have skyrocketed since the 90s, and a rise in both overseas and postgraduate students has also lead to demand for a different approach to student accommodation. A fully furnished, high end studio apartment gives students their own space and privacy.
Extra features are designed to allow students the option of socialising, they are not forced into it like in a shared house, and Zumba classes, inspirational talks and move nights are all included with the rent.
It isn’t just students from wealthy backgrounds who are choosing this type of accommodation. Speaking to The Guardian, one student from Nottingham Trent said “It’s spacious, modern and fancy. But the rent is higher than my original budget.
It’s using up all my loan, plus my savings from two part-time jobs, and I’m working three days a week to pay the rent”. Increasing debts after university mean that students are taking their studies more seriously than ever before and having a quiet place to study and live is essential.
With the increase in tuition fees for British students and significantly higher costs for overseas students, extra spending on accommodation isn’t as much of a stretch as it would have been previously. Students even see living in better accommodation as an academic advantage.
Another student said “It looks lush and the atmosphere is relaxing, which helps me to focus and feel I’m on top of things. I think my grades will improve this year. I feel mentally stable, and instead of cleaning up my housemates’ mess, I immediately start studying when I get home.” With such a competitive jobs market for graduates, and such high expectations from universities, this advantage is often seen as a necessary cost.
For potential investors, a student apartment or studio is a wise move, with strong yields and growing demand. Property investment specialists like RW Invest are developing lucrative PBSA properties in locations that are perfect for the students of tomorrow. The UK higher education sector is one of the most thriving and growing parts of the UK economy and PBSA is a great way to capitalise on these new opportunities.