Massive rise in purpose-built student accommodation supply in 2017

There has been a record number of new student accommodation bed spaces delivered in 2017, with possible consequences for future buy to let investment in the sector.

Cushman & Wakefield says the total number of purpose-built spaces available in the UK is now 602,000.

However, while the numbers of newly delivered en-suite and studio spaces have both increased significantly, the supply of studio rooms has increased by 106 per cent since 2014.

Overall rents per bed space in student accommodation increased 2.9 per cent between academic years 2016/17 and 2017/18, marginally above the 2.7 per cent seen during the same period in the previous year, indicating what Cushman & Wakefield describes as “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.

In Manchester, which has the largest student population outside of London, annual studio rents increased by five per cent despite the number of studio beds rising 61 per cent in a year, thanks to tight restrictions on development. 

In Glasgow, however, the number of studio beds increased 29 per cent, while annual rents decreased by two per cent. 

C&W says 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 some 21 per cent (or £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 per cent (working out at £2,613 per year).

The private sector dominates the supply of new developments, delivering 87 per cent of all new beds so far in 2017/18. 

However, universities continue to provide the largest number of bed spaces, offering 57 per cent of all rooms available in 2017/18. Overall en-suite bed spaces now represent 56 per cent of the market, whilst studios account for 12 per cent of all beds.