As applications from EU students to UK universities fall for the first time in six years, an over-supply of purpose-built student accommodation is becoming apparent according to research from an online lettings operator.
StudentTenant says that £5.8 billion was pumped into the student property sector last year, with investor demand for student accommodation growing even after the Brexit vote - in the year since June 2016 some £3.1 billion worth of student accommodation was sold to investors, more than double the amount traded in 2013 and 2014.
“But how well it will continue to grow post-Brexit is now a bit of a grey area” according to Danielle Cullen, managing director at StudentTenant.
“We’ve found that overseas students generally opt more for purpose-built student accommodation over private properties. They’re travelling hundreds of miles to study away from home, often to a country they have never been to. They like to have the extra support on offer through these types of residences” she says.
“Falls in student numbers inevitably means an excess supply of housing, and it looks set to continue for quite a number of years. The drop in demand is good for competition, and could drive down the price of accommodation in the short term, but the long term effects on the UK student housing sector could be damaging. We could see a fall in investment in the future as investors opt to capitalise on growing markets elsewhere.”
StudentTenant claims that following the referendum vote last year, applications to UK universities have fallen for the first time since 2012; as of June this year, EU applications fell by five per cent from 51,850 to 49,250.