A record number of new student accommodation bed spaces (30,000) were delivered in 2017 in the UK to date, taking the total number of purpose-built spaces available to 602,000, according to new research from Cushman & Wakefield.
Cushman & Wakefield’s UK student accommodation report 2017/18 shows that while the numbers of newly delivered en-suite and studio spaces in the country have both increased significantly, the supply of studio rooms has increased by 106% since 2014.
'It is encouraging that the student accommodation market continues to flourish despite initial concerns following the EU Referendum and the impact of increased student tuition fees,' said David Feeney, advisory associate at Cushman & Wakefield. 'However, in a number of cases studio development has been driven by higher prices rather than by true student demand, which now risks oversupply. En-suites and shared rooms provide a cheaper bed and more of a social experience, with communal and shared spaces.'
Overall rents per bed space in student accommodation increased 2.9% between academic years 2016/17 and 2017/18, marginally above the 2.7% seen during the same period in the previous year, indicating the sustained health of the student accommodation market as a whole. However, there were significant variations across the UK as well as by type and sector.
Regional variations
In Manchester, which has the largest student population outside of London, annual studio rents increased by 5% despite the number of studio beds rising 61% thanks to tight restrictions on development. In Glasgow, however, the number of studio beds increased 29%, while annual rents decreased by 2%. En-suite rents have increased by the most in Birmingham and Bristol (4%), followed by Edinburgh, Manchester and Nottingham (3%). En-suite rents are highest in London, at an average cost of £195 per week. In Manchester they average £142 per week but the cheapest average weekly rent of the cities surveyed was in Sheffield (£120 per week).
'There is a real opportunity for developers to meet the demands for more affordable accommodation and provide more standard or en-suite rooms for students. Studios are 45% more expensive but do they offer a 45% better experience? It is all about the value of the experience and this will increasingly drive students’ preferences for accommodation,' Feeney added.
The private sector continues to offer the most expensive accommodation in the market, with average annual rents per bed space (excluding London) in the private sector 21% (£1,071 per year) more expensive than university managed accommodation. Within the private sector the annual difference between studios and en-suites (excluding London) is 45% (£2,613 per year).
The private sector dominates the supply of new developments, delivering 87% of all new beds so far in 2017/18. However, universities continue to provide the largest number of bed spaces, offering 57% of all rooms available in 2017/18. Overall en-suite bed spaces now represent 56% of the market, whilst studios account for 12% of all beds.
