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How international interest is driving the UK’s student accommodation sector

Increased capital and a world-leading higher education system are helping to make the UK’s student accommodation market one of the largest in the world.

Student Property Investments

Increased capital and a world-leading higher education system are helping to make the UK’s student accommodation market one of the largest in the world.

2015 has already been a record-breaking year for the student property market, with Q1 seeing £3.3 billion worth of investment – surpassing the entire total value of transactions in 2014.


The surge of activity in the sector has been mainly driven by the completion of a number of high profile transactions for large property portfolios on behalf of private equity and pension funds.


The international interest in the UK’s student market has helped it to buck the trend usually seen in an election year, performing strongly in spite of the uncertainty associated with the months prior to the polls.


Already the UK’s best performing asset class, the rise of purpose built student accommodation developments and the strength of the UK’s university system has been an attractive prospect for property purchasers around the globe.


Over the past three years, property agent Hopwood House estimates that nearly £9bn has been placed within the sector, with most industry predictions expecting the asset class to continue to grow.


This expansion has been particularly prominent amongst international investors, as the stability of both the UK’s student accommodation and the property market in general has been seen as an encouraging factor for potential purchasers.


International interest in the UK’s education system has long been felt through the widespread growth in the number of international students wanting to study in the UK.


Worth approximately £10bn to the UK’s economy, the number of international students in the UK has already doubled in the past decade, with a further increase of 15-20% expected in the next five years. It is these international students who have also been the main tenants for purpose built student accommodation blocks, with domestic students only recently beginning to move towards these more modern and luxurious options.


The shift in student tastes towards purpose built student accommodation has helped to grow the student accommodation market to the record quarter it has experienced this year. With the large number of international students expected to join the UK’s education system over the coming years, the sector is forecast to continue on its upward trajectory.

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