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Student Rents Rise by 2.7% in 2016

Average rent inflation across the UK’s student accommodation sector has risen to 2.7%, driven by demand for beds in the private sector, according to a new report.

Student Rents Increase by 3.5% in Private Sector

Average rent inflation across the UK’s student accommodation sector has risen to 2.7%, driven by demand for beds in the private sector, according to a new report.

The latest figures from Cushman & Wakefield show that Purpose-Build Student Accommodation (PBSA) has seen a rental increase of 3.5%, whilst university provided accommodation generated a further 2.4% in rental income compared with last year.


Rising rents have been greatly affected by the continued high demand for high quality accommodation claims the report, with full-time student numbers increasing to a record 1.7 million for the 2016/17 academic year.


Despite record number of student beds becoming available in the UK following a 5.4% year-on-year increase in supply, the 568,000 beds on the market are still insufficient to meet with demand.


The research indicates that the ratio of students to beds in the UK has actually increased to 2.3 from 2.1 in 2015, despite the record levels of development seen in 2016.


While the latest figures indicate that applications from EU-based students may have fallen since Brexit, a rising number of students from the UK, in addition to non-EU international students looking to capitalise on the weak sterling, looks to minimise the impact of this decline in applications.


According to the research, the student accommodation sector is set to have achieved £3.1bn of transactions by the end of 2016 – in line with the projections released by CBRE last week.


Commenting on their expectations for 2017, Mike Mitchell, partner in Cushman & Wakefield’s student residential investment team, said:


‘With over £1bn of potential investments currently queued for sale, 2017 will undoubtedly be another strong year for transactions.


‘There are several overseas investors with unfulfilled requirements circling the market. This will undoubtedly act as a catalyst for further sales and consolidation into 2017 – especially as real estate investors increasingly turn to alternative assets such as student accommodation in search of returns unavailable elsewhere.’