The UK's chronic shortage of accommodation for students in major university towns has once again come to the fore.
The start of the 2014/2015 academic year saw an extra 30,000 places for new students offered by UK universities, which has increased the pressure on student accommodation in an already undersupplied market. The increase in the number of new places followed the relaxation of government limits. Next year these restrictions are due to be dropped altogether, which could lead to even more new places being offered to students in the 2015/2016 academic year.
Both privately rented student accommodation and university-supplied halls of residence are in short supply. In fact, the supply of both types of student accommodation is inadequate to meet current demand. A BBC investigation has revealed that many students within halls of residence are being forced to share single rooms with other students, as otherwise there would simply not be enough rooms to go around. In order to provide all first year students with rooms, some universities such as Bristol are being forced to install bunk beds in rooms which offer only a single desk and floorspace designed for one occupant.
Bristol university described the situation as "not ideal" and said it was "working very closely with [affected students] to address the situation."
Other universities, such as Aberdeen, resorted to sending students to hotels in order to try and rectify the situation.
With university-owned accommodation in short supply and the private rental sector also under pressure, more and more students are turning to privately-owned purpose-built student developments for a permanent place to stay. These are often similar to halls of residence in many ways, offering purpose-designed student studio flats or "pods" with shared facilities within a large block. Private student accommodation blocks often offer better facilities than their university-owned equivalents or shared houses. Students often also enjoy the increased levels of privacy and independence they offer over other private student housing options such as shared occupancy of family homes.
The lack of university-owned accommodation and undersupply in the private rental market has drawn a lot of attention from private investors and developers in recent years. A spate of new developments using private investor funds has done little to cut into the undersupply, and with the limit on new places due to be dropped, demand looks like it will remain extremely high. This has earned the student accommodation market a reputation for high yields and a reliable stream of tenants. Indeed, student accommodation is the UK's highest-performing asset class. Purpose-built student accommodation is becoming an especially popular investment option. Not only is it gaining more and more attention from students, increasing its strength as an investment, but also offers a way into this high-demand property market that usually costs less than a one bedroom apartment.
*This post was published according to the "Contributed Article Terms and Conditions"