Despite the recent fall in top A-level grades across the UK, the demand for Purpose Built Student Accommodation (PBSA) is still high. In the run-up to the academic year, which starts in September, students from around the country will soon be on the move and will need secure accommodation to begin their studies. On top of this, overseas students will travel to the UK for the first time, creating an even greater demand for PBSA.
Domestic student numbers recap
According to recent statistics from UCAS, 79% of UK 18-year-olds have secured their first-choice university, which is only slightly lower than the 81% in 2022. Additionally, 12% have been placed at their insurance choice, indicating that a significant number of students have still found accommodation options that meet their needs.
While 9% of students have not been placed at their first or insurance choice and are now in Clearing, this is a relatively small percentage compared to previous years. In fact, the number of available courses in Clearing has reached nearly 29,000, offering a wide range of options for students to find suitable accommodation. Additionally, there are currently 8,000 apprenticeships listed on ucas.com, providing alternative pathways for students who may be interested in pursuing vocational education.
Despite slight fluctuations in the number of students accepted into universities and colleges, there has been a steady increase in overall acceptance rates over the past few years. This year, 414,940 applicants have gained a place, which is a 1.5% increase compared to 2019.
Specifically, 230,600 UK 18-year-olds have been accepted, showing a 15.7% increase from 2019.
These statistics indicate that there is still a high demand for PBSA among domestic students, making it an attractive investment opportunity for property investors. By providing secure and quality accommodation options, investors can tap into the ongoing demand and generate a stable income stream from this asset class.
Overseas student intake recap
For overseas students, PBSA is an essential consideration when planning their studies in the UK. Plus, with the challenges presented by the pandemic now a distant memory, there is still a significant demand for PBSA among international students.
According to UCAS, a total of 51,210 international students have been accepted into universities and colleges across the country, which is only a slight drop of 2.3% compared to last year.
The top three countries of overseas students travelling to the UK are China, India, and Hong Kong, indicating the global appeal of the nation’s institutions. These students are seeking secure and comfortable accommodation options that cater to their specific needs. PBSA provides them with a convenient and reliable solution, offering amenities such as furnished rooms, communal areas, and access to academic support.
Investing in PBSA can be particularly beneficial for property investors targeting international students. The ongoing demand from overseas students ensures a steady rental income and potentially higher occupancy rates. Moreover, with the growth in international student numbers expected to continue in the coming years, investing in PBSA offers long-term potential for building wealth and generating passive income.
By providing high-quality and well-managed PBSA, investors can tap into this lucrative market and cater to the needs of overseas students, ultimately creating a reliable investment opportunity that yields strong returns.
Considerations for PBSA investors
When it comes to investing in Purpose Built Student Accommodation, there are several key takeaways for investors to consider. Firstly, the evergreen nature of the student market means that there is a consistent influx of new tenants each year, ensuring a steady stream of rental income. This makes PBSA an attractive option for passive income seekers.
Additionally, the fully managed nature of PBSA makes it a stand-out choice for portfolio diversification. With property management taken care of, investors can focus on other aspects of their strategy without the added stress of managing the property themselves.
PBSA also offers the potential for higher-than-average rental returns, making it tangible for investors who want to generate additional income streams from their investments. The demand for secure and quality accommodation among domestic and overseas students ensures a high occupancy rate, further enhancing the rental potential of PBSA.
Finally, the low entry-level price tag and generally zero per cent Stamp Duty rate make PBSA a particularly attractive option for those looking to expand their property portfolio. With the potential for strong returns and minimal upfront costs, investing in PBSA offers a reliable way to build wealth and generate passive income.
Overall, Purpose Built Student Accommodation presents a lucrative opportunity for property investors, offering a reliable income stream, portfolio diversification, and the potential for high returns.
Following the link to view our latest fully managed Student Accommodation Investment which offers an assured rental return.
