Industry News


The big business of student housing revealed


The huge sums of money being invested in the growth of student housing have been revealed by an investigation in The Guardian newspaper. Despite concerns over the possible impact of


Brexit, it appears overseas investors and wealth funds are still willing to provide billions of pounds for building new accommodation blocks – much of it on high quality flats with extras, such as cinemas, gyms, pools and concierge services. There is also an active market in refinancing, as well as buying and selling existing stock. The paper reports that the UK’s current stock


of purpose-built student accommodation is estimated to be worth £46bn, while new developments completed this year are expected to add a record £4.7bn to that. It says that in 2016 some £3.1bn worth of


student halls were sold – more than double the amount traded in 2013 and 2014. All five of the biggest deals – worth a combined £1.5bn – were sold to overseas investors. The largest transaction was the purchase by


the property arm of Temasek, the Singapore state investment fund, of a portfolio of 25 student buildings in several cities including London and Manchester.


Luxury Hiew Yoon Khong, the chief executive of


Temasek’s real estate arm Mapletree, is quoted as saying “Student accommodation is a big business and relatively low risk.”


Research undertaken by property experts


Knight Frank is reported to show that more than 20 per cent of students today are prepared to pay more than £160 per week for the right accommodation and facilities. The Guardian’s report cites the example of


The Neighbourhood, a new development in Cardiff, which offers a 24-hour concierge service to help its student tenants with “anything they need.” This is far removed from the college porter who provided a low-key security service and distributed the post. Students living in the 10-storey block in


central Cardiff are offered weekly room cleaning, a twice-weekly laundry service, a 32-inch smart TV, a prepared breakfast to take to lectures, a “fully loaded” gym, cinema and free bikes. The cheapest rooms cost £189 a week or £236 for an extra large studio, while traditional student halls of residence provided by Cardiff University cost £80 a week. The developers of The Neighbourhood said


“We spotted a huge hole in a very densely populated student accommodation market, so we decided to create an exciting, bespoke new brand providing experiential, high-end, high- spec, service-driven luxury urban living experiences for students.”


Demand Long gone are the days of shared kitchens and


bathrooms, as today’s students are being offered studio bedrooms with a bathroom, kitchenette


Record numbers of tenants giving up on homeownership


Over 250,000 non-homeowners appear to have given up on the dream of owning their own property in the past year, putting further pressure on the private rental sector of Britain’s housing market. Now in its fifth year the 2017 Homeowners


Survey, is an annual study conducted by the HomeOwners Alliance and BLP Insurance into the concerns, views and issues affecting British homeowners and aspiring homeowners. Its findings have been backed up by two further studies. This year it found that for the first time there


has been a drop in the number of non- homeowners who aspire to own. In 2013, 65 per cent of non-homeowners aspired to homeownership, with this number increasing every year and peaking at 73 per cent in 2016. But this year, the numbers have fallen for the first time, back to 71 per cent. This equates to around 253,166 people across


the country who have given up on ownership in the past 12 months. The statistics mirror the rise of the previous Government’s flagship Help to Buy programme launched in 2013 and is now


receding with the cancellation of the mortgage guarantee part of the scheme in 2016.


Barrier Not surprisingly a whopping 86 per cent of aspiring homeowners say the key barrier is house prices, up 3 per cent on the previous year. The ability to save for a deposit and availability of homes are also cited as major issues among aspiring homeowners. The HomeOwners Alliance champions the


interests of Britain’s homeowners and aspiring homeowners, providing advice and acts as the voice for homeowners and buyers. Their findings have been supported by a thinktank, who say that a generation of young Britons are being confined to rented housing and a less secure future. The Resolution Foundation has found that in


the last 20 years, rates of home ownership have halved among young adults (aged 25 to 34) across huge parts of the country. Home ownership rates for this age group have fallen to as low as 20 per cent in outer London, to 29 per cent in Greater Manchester and 31 per cent in


and living space as well as a bed and desk. Developers and designers say it is the standard and range of communal spaces that are the most important factors for attracting the highest-paying students. James Pullan, the head of student property at


property consultancy Knight Frank, said demand for investment in student accommodation was riding high despite concerns that Brexit might reduce the number of high-spending foreign students coming to the UK. “They have seen how much others have made


from student housing and want to join them,” Pullan said. “More than 70 per cent of investment is coming from overseas buyers, from sovereign wealth funds and ultra high net worth individuals and private equity.” Meanwhile Andrew Mason, the organiser of


the Student Housing 2017 conference at the De Vere Grand Connaught Rooms, said the annual gathering had grown from 200 people to more than 500. He described student housing as a “truly global asset class”.


West Yorkshire. Lindsay Judge, senior policy analyst at the thinktank, said “From Bristol to East Anglia and up to West Yorkshire, large swaths of young families simply cannot afford to buy a home. This has implications for the here and now, but also for the future when their children grow up and they approach retirement without this key asset to draw upon in old age.”


Poverty Further evidence of the growing divide came from a Cardiff University study that found in- work poverty was disproportionately concentrated in households in private rented housing, who have been hit by a combination of rising rents and caps on housing benefit. The continued growth of this form of housing tenure is projected to increase the numbers facing in- work poverty. Rod Hick, a social policy lecturer who led the


research, said “If policy does not do more to tackle rising housing costs directly, then it seems likely that these will eat up gains made elsewhere – for example, in terms of the planned increases in the minimum wage.” The study found a record 60 per cent of British


people in poverty live in a household where someone is in work, with the risk of falling into financial hardship especially high for families in private rented housing.


www.housingmmonline.co.uk | HMM July 2017 | 21


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