With increasing developmental time and competition for land, demand for student accommodation could outstrip supply in student cities across the UK.

Summary:

Demand for student accommodation will exceed supply as the length of developmental pipelines increase

Despite local authorities acknowledging rising demand, many areas are finding it difficult to adequately plan future student accommodation

Popular student cities such as Manchester and Newcastle only have enough student accommodation for 34% of their respective student body

Demand for student accommodation will extend far beyond the supply due to an increasingly pedestrian developmental pipeline.

Student accommodation is fighting for land against assets that are given preference from the government, after Chancellor George Osborne’s statement that 400,000 new homes will be built between now and 2020.

Due to the higher quality provided by privately rented student accommodation compared to university-owned, expenses can also affect the pipeline and speed of development completion.

Melanie Leech, British Property Federation Chief Executive, said: “The development pipeline is slowing … student accommodation, like other asset classes, is fighting for land in certain parts of the country. The risk is skewing consents towards housing when other types of accommodation need to be considered.”

There is a rising demand and acknowledgement from local authorities for the need for student accommodation, but it is difficult for authorities to plan adequately in their areas until the impact of the 2012 university fee hike has been fully realised.

Long-term trends show the student population increases steadily over time, but if there was an increase many popular student cities across the country would struggle to keep up with demand. Decreasing pipelines could affect cities such as Manchester and Newcastle, as each only have enough dedicated student accommodation for 36% of their entire student body.

Source:Select Property