Student houses used to have a terrible reputation – grotty terraces with leaky roofs, loud music at all hours and everyone dreading the end-of-tenancy inspection. But times have changed, and students are now offered accommodation worthy of the professionals of tomorrow. Purpose built student accommodation (PBSA) is now an asset class in its own right, and the market has seen real growth in the last three years.
What is purpose built student accommodation (PBSA)?
“PBSA is different from the halls of residence provided by universities. PBSA is owned by private investors and is similar in standard to the kind of accommodation young professionals look for,” explains Chloe Robinson, estate agent at Henry Wiltshire Bow. “Bedrooms often include a private bathroom and kitchenette, and some of them have a cinema and a gym, and even a concierge.”
Student accommodation in Bow
Unite Student Stratford ONE was built for the London Olympics in 2012, with a long-term view of it becoming student accommodation once the athletes had gone home. Unite Student is a private company through which students can rent a room in purpose built student accommodation – testament to the growth of this particular property market and the enthusiasm of investors.
Why invest in student accommodation?
The PBSA market has seen phenomenal growth, with a 17% increase in the last year. This corner of the UK property market is now thought to be worth £46 billion.
In London, the majority of local students live with their parents in order to save money. However, that’s just not an option for international students who currently make up 23% of the student population and need somewhere to live. The number of students coming to the UK from overseas could well increase – Brexit talks are negotiating for international students to be excluded from immigration targets. If successful, this could lead to a 6% increase in the number of international students in the UK.
Yearly tenancies also enable investors to increase their returns in the student rental market. Long-term tenancies, such as a landlord might offer to young professionals or to a family, reduce the possibility of increasing rents annually. However, with student accommodation, tenants will typically move out after a year, giving landlords the opportunity to increase rents in line with inflation and financial goals.
Invest in property in Bow
At Henry Wiltshire Bow, Chloe and the team offer expertise on all aspects of buying, selling and renting property in East London. Contact the office on 020 3696 9610 to find out more about investing in the Bow.