Even though the UK property market has held up fairly well in light of Brexit difficulties, it is difficult to find any real areas of growth. Or is it? Student accommodation has changed dramatically over the last 20 years or so. The type and quality of accommodation now available is night and day compared to that of years gone by. Gone are the damp and dingy flats, the non-existent decor and minimal furniture, in place we have purpose-built student accommodation buildings with communal areas and private facilities.
Which cities have the most universities?
A recent report confirmed that there are many cities throughout the UK which have multiple high quality universities. There is also an array of world-class research facilities up and down the country which offer further opportunities to market student like accommodation. The UK cities with the largest number of universities are as follows:
• London, 40
• Birmingham, 6
• Glasgow, 6
• Edinburgh, 6
• Leeds, 5
• Manchester, 5
• Liverpool, 4
• Belfast, 3
• Newcastle, 2
• Sheffield, 2
Birmingham is an area of the UK which has attracted major interest from student accommodation property developers in recent times. It has a first-class travel network, booming economy, low unemployment and even in light of Brexit difficulties is set for further growth in the short to medium term. However, these figures in isolation do not tell the whole picture.
Universities per 100,000 population
If we look at the prospects for student accommodation by comparing the number of universities per 100,000 population this casts a very different light of the situation.
• Cambridge, 2 universities/1.6 per 100,000 population
• Dundee, 2 universities/1.4 per 100,000 population
• Oxford, 2 universities/1.2 per 100,000 population
• Edinburgh, 6 universities/1.2 per 100,000 population
• York, 2 universities/1.0 per 100,000 population
• Aberdeen, 2 universities/0.9 per 100,000 population
• Exeter, 1 university/0.8 per 100,000 population
• Plymouth, 2 universities/0.8 per 100,000 population
• Norwich, 2 universities/0.8 per 100,000 population
• Ipswich, 1 university/0.8 per 100,000 population
You will notice that only Edinburgh appears in both lists however it is not top of the list. So, on this basis Cambridge seems to offer the best value although Edinburgh offers good value and has six universities.
Impact on property prices
It is common knowledge that popular university cities seem to fare better than average when it comes to house price appreciation. It is not only the fact that these cities attract significant numbers of students but also the knock-on effect to services and local economies. For example, we know that 49% of students who study in Birmingham will stay in the city once they have graduated. This leads to an ever-growing local economy and demand for more and more student accommodation with flats effectively taken out of the equation each year by those who leave university and remain in the city.
There is some concern about how Brexit will impact the number of overseas students coming to the UK but in many ways this is a red herring. Contrary to popular belief, the UK is not closing its doors to immigration but simply transferring current non-EU immigration policies to those coming from the European Union in the future. We also know that further education is popular when economies are booming and also when economies are struggling. In some ways it is difficult to see any negative aspects when looking at student accommodation. However, it is worth pointing out this is a very competitive marketplace.