- Created: Tuesday, 19 April 2016 08:17
‘The UK student accommodation market is a rapidly expanding and increasingly lucrative field of investment. Growing faster than any other asset class since 2011, the number of UK students is predicted to grow at a rate of 15-20% over the next five years, increasing demand and making student accommodation the top-performing property investment field in the UK.’ (Select Portfolio investment newsletter, November 2015)
Investment in student housing reached a five-year high last year. According to the estate agent Savills, £5.8bn was pumped into the market in 2015. Newcastle is no exception to this growing trend, as investors rub their hands over the easy profits to be made from student accommodation. Government figures obtained by the local newspaper reveal that Newcastle has one of the highest proportions of student homes in England: ‘figures from The Department for Communities and Local Government show that the city had 7,578 homes exempt from council tax due to occupation by students. This represents 6% of the housing stock; one in 17 homes.’ (The Chronicle 19 Jan 2016)
Current schemes in Newcastle have created 11,000 student rooms since 2008. In contrast, in 2009 the council announced plans to build a mere 1,650 new council homes over a ten-year period and is currently missing this target by 38.3%. Addressing the lack of decent social housing is not an attractive investment prospect compared to the lucrative student accommodation market. The needs of communities are being overlooked whilst huge investment projects are swamping the city centre. Meanwhile, Newcastle Labour council has just unanimously voted through another £32m worth of cuts to services, bringing the total to £222m over the last five years.