There has been a sharp rise in the number of students living in private sector purpose-built student accommodation (PBSA) in the UK in recent years, fresh figures provided by Knight Frank show.
The property consultant reports that the volume of students residing in PBSA in the UK has more than doubled over the last decade, making it one of only a few asset classes to deliver positive rental growth every year since 2007.
The average weekly rent for en-suite accommodation across the UK has climbed from £120 to £143 over the last five years, underpinned by an annual growth in rents as well as the organic growth of the sector, including the introduction of new, higher specification student property into the market, which largely explains why the market for student property is gathering investors’ interest.
The existing PBSA market is comprised of assets with an estimated value of £42.3bn, including both private sector PBSA and university maintained PBSA. However, based on the current level of investment and construction activity in this sector indicates that by 2020, this value will grow to £50bn.
“The importance of higher education remains unaffected by the tumult of economic cycles,” said James Pullan, head of student property at Knight Frank.