Student Housing Stock

One in every four full-time students lives in purpose built student accommodation. The market has matured significantly in recent years with greater competition from private sector providers through the direct-let market or by providing accommodation on behalf of the university. This has led to an improvement in the quality of the accommodation that universities and operators provide along with all the additional services and amenities they offer.

Despite this increase in competition, our analysis of student housing stock across five cities shows that there is still a substantial amount of stock that is of a lower quality than desirable. Our survey covers the cities of Bristol, Edinburgh, Liverpool, Manchester and Newcastle and so provides an indicative picture of the wider purpose built student accommodation market. It highlights that over 50% of the beds in these five cities are in lower quality halls of residence. Of these, two-thirds are managed by universities.

This situation offers a significant opportunity for operators in the market. We calculate the majority of lower quality blocks are in good locations and so could be renovated to a higher standard. However, 16% of all beds are in lower quality blocks in poor locations (this ranges from 5% in one city to 30% in another). For operators looking to expand, the opportunity to take market share from these lower quality and poorly located blocks will be attractive.

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Student Housing Stock

International students are an incredibly important component of UK universities and hence the wider UK economy. With one-third of international migrants arriving in the UK for ‘formal study’, the current Government’s focus on reducing net migration has caused some concern. The number of people arriving for formal study has fallen by 28% over the last four years. However, the number of Non European Union domiciled students at university has grown over the same period. More recently, total numbers have been fairly static but this compares well to UK and other EU domiciled student numbers.

The breakdown of student numbers by country shows that the number of students from China has continued to rise. They have grown by 78% over the last five years. Conversely, the number of students from India has fallen by 34% over the same period. Analysis of international student flows suggests this may be a global trend with falling numbers of students leaving India rather than a UK based issue.

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Taken from
Spotlight: UK Student Housing 2014