Private student landlords are being left behind as investment in private halls of residence continues to soar, according to lettings portal StudentTenant.com.
Private Student Landlords Left Behind as Private Halls Investment Grows
One of the UK’s largest student property developers has recently set out plans to invest more than £300m over the next three years to create an additional 7,500 student rooms across the UK.
This news follows shortly after the student property specialist revealed a strategy shake-up to target more towns and cities with high-performing universities.
This academic year, the group has opened five new properties, creating 3,000 beds, in addition to 4,800 in ongoing projects for 2017. In the next three years, a further 7,000 beds are set to be created in new private halls developments across the UK.
The Managing Director of StudentTenant, Danielle Cullen, warns: “We’re currently seeing a student rental crisis in many areas in the UK. As a growing imbalance between supply and demand develops, rental prices are increasing, making it a less affordable option to study away from home. The student rental market is desperate for investment and it’s great to see vast amounts of money being spent.”
With over 1.7m students in full-time education in the UK and almost 60% of those living away from home, demand for student housing is high.
As for supply, 53% (230,000 beds) of total purpose-built stock is university-owned, while 47% (200,000 beds) is privately owned by private hall investors and landlords. But as investment in private halls rises, there are growing concerns for private rental housing.
What is uncertain, though, is the impact that this will have on the residential shared housing market and private student landlords. In 2015, private halls only accounted fro 6% of the entire student property stock. In recent years and based on development plans, this is set to significantly increase.
Some cities have recently had new private halls of residence developed, causing a handful of private student landlords to be left with unlet properties at the end of the last academic year.
StudentTenant is worried that this trend of leaving private student landlords behind will stick.
Cullen continues: “Whilst investment into private halls is great for students and competition, it will have a huge impact on private landlords in the areas of investment. Traditionally, private halls were always the higher end of the market in terms of both quality and price. Now more developments are completing, however, creating more competition, the price points are lowering, leaving some private landlords in trouble.”