Is Liverpool Oversaturated With Student Accommodation

Liverpool Skyline

Liverpool has been a growing city as recent modernisation projects and new developments have turned an all-ready thriving city into one that has moved into the 21st century.

As one of the most prominent cities in the UK and in a prime location in the north, it has always been on the radar of investors. As the city has grown in population and seen a lack of housing supply, it has been an investors haven, particularly in the residential sector but what about the student accommodation sector?

Is there a demand?

When it comes to top universities, Liverpool is up there as one of the best and that has increased the demand from students to study there. With this demand has come an increase in the construction of purpose-built student accommodation and that also has to compete with the traditional student accommodation.

Analysing the figures might paint a certain picture but perhaps investors should still keep an open mind when it comes to investing in student accommodation in Liverpool. As it currently stands, there are 6,000 student bed spaces being constructed and this will be added to the already increasing number of student properties in the city, and that has left investors feeling slightly hesitant about investing in this sector in the city. This is understandable, especially when reports from the likes of Savills says that the supply of property is surpassing the demand from students. Worrying it might seem, and this might leave investors thinking that the days of high yields and low competition have gone.

Around the city centre, it is clear to see that the student accommodation sector is still thriving. Large developments are punching their way into the skyline with some developments having the ability to house over 1,000 students. There are many smaller developments taking place and over the last three years alone more than 5,800 bed spaces have been created.

Is Liverpool Oversaturated With Student Accommodation Aspen Woolf

Investment Opportunities Remain

Liverpool is already home to Purpose Built Student Accommodation but a large portion of that comes in the form of student accommodation located in the suburbs. Many years ago, students were seeking this kind of accommodation and that saw more and more properties being turned into houses in multiple occupation (HMOs) in an attempt to soak up the demand. While students used to have a need to live in the suburbs, they have now changed and this has meant that they have a real appetite to live in the centre of the city. Here they can be close to campus as well as the lively atmosphere and wide range of bars and restaurants. As a result, many of the student accommodation properties located on the suburbs are now being altered to accommodate young professionals who are living and working in the area but require more space and peace in the suburbs. This has meant that older student properties are being taken out of the sector, potentially leaving a gap for more centrally located student accommodation to be built.

Another positive is that in recent years, the number of students has increased considerably. Between 2015 and 2016 alone, the number of students increased from 50,000 to 60,000 and that number has grown and will continue to grow. So much so that the universities in Liverpool only provide beds for around 16% of their students and so, that means that the 84% shortfall has to be made up somewhere. This is where opportunities become apparent for investors.

Is Liverpool Oversaturated With Student Accommodation Aspen Woolf

Investors should begin looking at the bigger picture and the way in which student numbers are going to grow. This is a figure that will not only grow as a result of domestic students but also overseas students. More and more foreign students are choosing to come to Liverpool for the high standard of education and with that comes an increase in demand for first-class accommodation. Students from Europe, China and Japan have a different set of needs when it comes to student accommodation and they are often more willing to pay higher prices for better accommodation with more features. Therefore, they often opt for student accommodation that has a lot more space and features such as security, gym’s, communal areas and luxury features that most would associate with accommodation in the residential sector. Along with this, international students require good access to transport links as well as the vast array of bars, restaurant and shops that can be found in the centre of Liverpool. So, in years gone by where they would have opted for an HMO located in the suburbs, they now have a new desire for excellent quality and a great location. This has meant that the outdated student accommodation is being cast aside.

When it comes to investing, investors need to pick their investments wisely and perhaps not focus too much on the figures. The needs of students are changing and with that should come a new approach from investors. Therefore, they should be focusing on accommodation that is within close proximity of excellent amenities, a high standard of quality and finished as well as other services that students can make use of.

Essentially, even though there are many developments springing up throughout Liverpool that are aimed solely at students, there are opportunities. Old landlords who were once the choice of students throughout the city are having to re-purpose their properties because students are no longer valuing lower priced rents. They are now looking for simple access to lectures and a short walk home after a night out and that is why the repurposing of old properties will help to readdress the increase in supply. Once the out-of-city HMOs have been removed from the sector, it will enable investors to make the most of the increase in demand once again. So, not everything is as it might seem and even if the figures are not looking favourable, things are likely to change and with that comes plenty of opportunities to invest.

 

91% of International Students Love the UK Best!

A recent study from Universities UK International has shown that 91% of students loved their UK university experience.

A highly impressive 91% of international students are satisfied with their UK university experience according to research from Universities UK International.

The findings are based on the feedback of 137,000 students from five other competitor nations – the USA, Canada, Australia, Germany and the Netherlands – placing the UK at number one in the rankings.

For property investors, these results confirm how student accommodation remains a relatively safe bet. Due to the esteemed reputation of British educational institutions, as well as these positive surveys, foreign student numbers will always be high.

The UK’s Competitive Advantage 2017

91% of International Students Love the UK Best! Aspen Woolf

Universities UK International (UUKi) regularly carry out studies on a wide range of university issues. They use data from the International Student Barometer which collects information from over 3 million students across the world.

This year’s report – titled the UK’s Competitive Advantage – highlights various factors that measure student experience. These include: arrival and orientation, learning environment, living standards and support services. The UK ranked highest across these four areas, an impressive feat and clear indication as to why so many foreign students come here every year.

As a result, 86% of international undergraduates are very likely to recommend their current place of study, a figure higher than the other five nations in the survey.

Students also take university league tables into account. The latest Times Higher Education World University rankings shows the UK has the most places in the European top 10.

Property Advantage

91% of International Students Love the UK Best! Aspen Woolf

Student property investment has soared in the past decade, with Savills’ expecting another £5 billion injection over the next academic year. This is mainly being ploughed into purpose-built student accommodation (PBSA) – a robust asset class that has experienced unparalleled growth.

This can be put down to a shift in student attitudes, especially in relation to international students. They prefer the private yet communal nature of PBSA, combined with a whole host of modern amenities and high-speed broadband connection.

Parents also appreciate the secure nature of private apartments as opposed to residential homes with multiple occupants (HMO’s). PBSA flats have three layers of security, making it extremely hard for intruders to break into the building, let alone an individual flat.

In addition, the EU Referendum result has created a devalued currency, something foreign students have been quick to take advantage of. An undervalued pound means lower tuition fees and living costs, thus making our PBSA flats more affordable.

Investment Opportunity

91% of International Students Love the UK Best! Aspen Woolf

The UK’s competitive advantage is dependent on the reputation and high quality of its universities. As the UUKi study shows, this is reflected with an extremely impressive foreign student satisfaction rate, placing the UK ahead of comparable nations.

A thriving social scene in notable university cities such as London, Manchester, Liverpool and Leeds also plays its part, as well as a rich sporting and musical heritage that foreign students appreciate.

In turn, property investors can be assured their investment will always generate interest, especially as international students tend to choose purpose-built student accommodation. For more information on student investment at Aspen Woolf, please get in touch today.

You can take a look at our current PBSA investment opportunities here.

UK Scoops Most Places in European University Top 10

These university rankings echo the strong performance of UK student property as a whole, particularly the PBSA market.

The latest Higher Education World University rankings by the Times shows the UK has the most universities in the European top 10, as highlighted below:

Higher Education World University Rankings 2016-2017
European Rankings

Ranking University Country
1 University of Oxford United Kingdom
2 University of Cambridge United Kingdom
3 Imperial College London United Kingdom
4 Swiss Federal Institute of Technology Zurich Switzerland
5 University College London United Kingdom
6 London School of Economics and Political Science United Kingdom
7 University of Edinburgh United Kingdom
8 Karolinska Institute Sweden
9 École Polytechnique Fédérale de Lausanne Switzerland
10 LMU Munich Germany

 

The Times compiled the top 980 universities in its latest 2016-17 list, basing its report on “13 carefully calibrated performance indicators to provide the most comprehensive and balanced comparisons available”. The rankings are universally recognised by students, academics and governments, as well as being independently audited.

UK Scoops Most Places in European University Top 10 Aspen Woolf

Image credit: University of Exeter via Flickr

Student Numbers

If you’re interested in the student property market, these results should solidify your confidence in the sector. High-performing universities with a prestigious history and famous alumni will always attract students from the UK and abroad.

UCAS recently reported that around 493,000 students have been placed on courses in the current 2016/17 academic year – a record high. The enrolment of 18-year-olds in particular has stayed resilient, showing that increased fees hasn’t put off youngsters from a university education.

Despite Brexit and perceived fears of a drop in EU applicants, it should be made clear that more non-EU students still come to the UK than Europeans. In essence, numbers won’t be affected too greatly, especially as access to the Erasmus exchange programme will almost certainly continue.

Property Impact

UK Scoops Most Places in European University Top 10 Aspen Woolf

Image credit: Vita Student via Flickr

An overfill of students who can’t find places in these top institutions will spill over into the UK’s other notable university cities, such as Manchester, Liverpool, Leeds and Plymouth.

Aspen Woolf has student buy-to-let properties in these areas, guaranteeing healthy yields of 7-10% over a sustained period.

Likewise, we’ve also recognised the strong performance of purpose-built student accommodation (PBSA), which is being favoured by undergrads, postgrads and international students alike. This is opposed to university halls of residence or a HMO (house with multiple occupiers) which are sometimes run-down, poorly maintained, and generally tend to be more inconvenient.

Studies show that the PBSA market has grown every year from 2007. This is in terms of investment as well as number of tenants. As student applications stay strong, the sector is less likely to be affected by wider economic affairs, making it a robust asset class.

Investment Opportunity

UK Scoops Most Places in European University Top 10 Aspen Woolf

Image credit: NEC Corporation of America via Flickr

The impressive European university rankings echo the strong performance of UK student property as a whole, particularly the PBSA market.

Students are now expecting a higher standard of living with en-suites, double beds and high-speed broadband connection. Our investment opportunities satisfy these demands thoroughly.

For investors, finding one of these particular properties puts you onto a winner, especially if located near to a university campus or transport links. Furthermore, when using Aspen Woolf, we’ll always have a management company in place for you and your investment so everything is taken care of on your behalf.

For more information, check out our student accommodation investment opportunities or get in touch.
If you’re interested in finding out more about the student accommodation market, you might enjoy Student Accommodation is the Ideal Investment in the Current Economy.

Student Accommodation is the Ideal Investment in the Current Economy

The UK student population is 2 million and they need somewhere to live.

With the UK set for political and economic uncertainty over the next few years, some commentators have predicted a period of stagnation for the property sector.

Although this remains to be seen and the market has held up well so far, one area that won’t be affected is student accommodation. This is because student investment is countercyclical in nature and less likely to be affected by the overall economy.

Students will always need somewhere to live, and if you can find a property in a favourable location, demand will hold up year-on-year. At Aspen Woolf, we offer a number of student properties for this exact reason.

Outstanding Performance

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Throughout the current decade, student accommodation has outperformed traditional assets in the property sector. Although recent external pressures on buy-to-let may partially explain this, the main reason is due to the strong demand for purpose-built flats in prime student areas.

Traditionally, first year students have had to rely on university-sponsored halls when they enrol – these are usually older buildings with limited space and basic amenities. Now, it seems undergraduates prefer modernised, purpose-built flats when given the option.

A recent report by Knight Frank backed this up. It showed students are prepared to pay increased rents if the facilities impress them, and so with many new developments containing gyms, games rooms and individual car parking, finding tenants should be of little worry.

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Even though many are being constructed in areas close to campus buildings, transport links and shops, there’s still a significant structural undersupply. It is here that individual investors can take advantage.

Yields are consistently high, helped by low-entry prices onto the market, with impressive occupancy rates. This isn’t a recent trend either, it has remained a resilient investment sector for many years now with no indication of slowing down.

In addition, rents are usually guaranteed by a parent and paid upfront. For investors, this provides great peace of mind knowing you’re assured both demand and rental income at the start of each term.

Positive Forecasts

Student Accommodation is the Ideal Investment in the Current Economy Aspen Woolf

Although the UK student population is roughly 2 million, there’s only enough private-sector accommodation to house a quarter of them. And despite increased university fees, applications don’t seem to be slowing down. It seems the student sector will remain a robust asset class for many years to come.

These positive forecasts are being recognised by wealthy foreign investors. Over 70% of new purchases are from private equity and high net-worth overseas buyers. Even if you can’t compete with this financial clout, as a private investor it pays to recognise their buying behaviour.

According to Knight Frank, the purpose-built student market is estimated to be worth around £46 billion, with a further £5 billion to be added in new developments this year. This shows that, despite the economic uncertainty around at the moment, one sector unaffected is student property.

At Aspen Woolf, we’ve recognised this trend and have sourced various student flats from hotspots across the UK. We’ll have management companies in place for the investment on your behalf, meaning all you need do is sit back and enjoy your assured rental yields of between 6-10%.

 

Take a look at our current student property investment offers today.

If you’re interested in investing in student accommodation, you may want to take a look at the Five Best Student Towns to Invest In.

Student Accommodation Sector Benefits from Soaring Foreign Investment

UK Student Accommodation Sector Benefits from Soaring Foreign Investment

Research by estate agent Savills shows that investment in purpose-built student accommodation (PBSA) has increased by 17% to over £5 billion this year. Confidence in the market remains high and any perceived fear over last year’s Referendum haven’t come to fruition.

Much of this recent investment is because of international backers who’ve increased their market share to 64% from just a third in 2015.

This in turn has helped the market grow significantly over the past two decades, with yields remaining stable throughout. In addition, rent increases of 3% per annum since 2014 surpassed all other real estate asset sectors, with potential for even more growth in the future.

Overall, the amount of private student accommodation remains well below student numbers in key UK university cities – something we’ve recognised at Aspen Woolf with a range of carefully selected student property at our disposal.

International Appeal

Interest from abroad has been the primary cause of large-scale investment in the PBSA market, with Asian financiers particularly active. For example, a massive £1.2bn came from two of Singapore’s leading real estate developers last year, fending off stiff competition from the US, Middle East and Russia.

This echoes what is happening throughout the sector as rival bidders often vouch for the same investment portfolio. Unsuccessful bidders retain a strong appetite to invest here however, and are expected to make more acquisitions throughout the 2017/18 academic year.

The student sector in the UK has remained a reliable asset class for many years now. Being ‘countercyclical’ in nature, it’s less likely to suffer from volatile markets or currency fluctuations. Shrewd international buyers therefore recognise it as a dependable hedge against other investments.

Student Accommodation Sector Benefits from Soaring Foreign Investment Aspen Woolf

Image credit: Duncan Hull via Flickr

Brexit

The EU referendum result didn’t do much to put off foreign investment, mainly because the supply and demand of student property will always hold up. UK universities are some of the most highly regarded learning institutions in the world after all, and keep attracting students from home and abroad every year.

The value of trade also backs this up. Since the Brexit result, more student real estate was purchased in the six months after June  23rd (£2.1bn) than in the six months before (£1.9bn).

Student Accommodation Sector Benefits from Soaring Foreign Investment Aspen Woolf

Image credit: Char via Flickr

Why the UK?

The student sector is ripe for investment for two main reasons – a constant volume of demand and a severe shortfall of suitable accommodation.

This is specifically related to purpose-built flats which students now tend to prefer, primarily as they offer a much more modern standard of living. Private student en-suite studios within communal buildings come with all-inclusive bills, high-speed internet and on-site facilities such as free parking, laundry rooms and even gyms or cinema rooms in some cases.

Conversely, traditional house sharing arrangements can leave students stuck in run-down, unsecured properties with untrustworthy landlords. By investing with Aspen Woolf, everything is managed so the tenant has far less to worry about in this respect.

For prospective investors, remember that undersupply in the sector will virtually guarantee enquiries, especially in prime areas near to a campus or transport links. University halls aren’t often upgraded to the modern standards of PBSA, meaning any new developments are snapped up quickly, especially by foreign students and postgraduates.

 

If you’re interested in investing in purpose-built student accommodation, get in touch today to see how we can help.

If you would like more information on investing in student accommodation, you might be interested in discovering why Student Properties Are a Safe Bet for 2017.

Student Properties Are a Safe Bet For 2017

Using a letting management agent means you don't have to deal with overwhelming demand from students.

Student accommodation blocks are now common sights in university towns and cities across the country. They’ve signified a move away from the traditional, tenement-type student digs, offering a sleek and secure way of living favoured by modern students.

Shrewd investors have been quick to spot their potential in recent years. They provide an attractive and often low-cost route onto the property ladder, with guaranteed enquiries year on year. Students will always need somewhere to live, particularly in areas close to their campus or local amenities.

In 2017, this demand will only grow as student numbers rise. Over 408,000 are currently on undergraduate courses, complemented by over 90,000 postgrads – an increase of 22 per cent from last year.

 

Purpose-Built Student Accommodation

Student Properties Are a Safe Bet For 2017 Aspen Woolf

Image credit: Elliott Brown via Flickr

The number of students living in private sector purpose-built student accommodation (PBSA) has increased sharply in recent years, making it one of the only property subdivisions to deliver positive rental growth every year since 2007.

Undergrads are increasingly looking towards more luxury accommodation in the modern era, preferring en-suite bedrooms, spacious common rooms and exclusive high speed Wi-Fi connection. Some developments even include games rooms and multi-gym facilities.

The market alone comprises assets worth over £40 billion, with the potential to rise even further over the next decade or so. Average rents have also risen in this time, generating around £150 per week.

 

Managed Lets

Student Properties Are a Safe Bet For 2017 Aspen Woolf

Image credit: Francisco Osorio via Flickr

By placing the purchase in the hands of a professional lettings agent, all the usual hard work and hassle of managing the property is taken care of. For the student sector in particular, this knowhow is especially valuable as the turnover of tenants is relatively high.

For example, as a private investor, you may not be able to deal with a flood of enquiries towards the start of term time. Aspen Woolf will take care of this on your behalf, answering questions from prospective tenants and vetting them in the correct manner.

Students also trust this approach more, knowing they won’t be left stranded with an unreliable or uncontactable landlord if something goes wrong. Any maintenance issues will be dealt with by us, along with regular inspections and inventory stock-takes.

 

Location

Student Properties Are a Safe Bet For 2017 Aspen Woolf

Image credit: Vita Student via Flickr

At Aspen Woolf, we only offer properties from the UK’s student hotspot’s such as Manchester, Huddersfield, Liverpool, Edinburgh and Plymouth. This assures your investment won’t be wasted as tenant demand is guaranteed every year.

We also look for universities with a high percentage of international students. This is because they’re often drawn to the PBSA due to its secure and more luxurious nature. Liverpool and Edinburgh Universities, for example, boast around a 30 per cent foreign student intake.

Student property remains a safe bet in 2017, especially purpose-built student accommodation managed by a professional estate agent. You’re getting a hassle-free and relatively low-risk way onto the property ladder, with typical yields of 7% – 10% with no signs of slowing down.

You can take a look at our student accommodation opportunities here.

If you’d like to talk through potential investments or have any questions, get in touch.