Buy to let landlords could lose out through the cut in University funding as it could alter the type of accommodation demanded by students as tuition fees and the number of international students increases to alleviate funding shortfalls, new research from CB Richard Ellis Residential indicates.
Funding cuts could result in a drop in available places of between 3,000 to 4,000 places for UK students, but this will be spread thinly across the UK limiting the impact on demand for accommodation.
Jennet Siebrits, Head of Residential Research at CB Richard Ellis explained: “Our research shows a strong correlation between the socio-economic status of students and the number of UCAS points they achieve.
“As entry criteria tightens, this suggests a higher proportion of students will come from higher income families where affordability is less of a concern, so good quality accommodation will still be in demand.
“An increase in tuition fees to mitigate funding shortfalls will hit middle-income families and affect accommodation budgets. We would expect low to middle-income students to continue to favour cluster flats over studios.
“Universities will be looking to attract mature and international students to plug the funding gap and this will underpin demand for high-end student accommodation and in particular studios. These students are typically paying much higher fees and have the expectations to match, so will demand a certain degree of comfort and privacy.
“Universities will need to respond to current conditions in a commercial manner by actively seeking to raise their international profile to attract overseas students.
Going forward big cities and Russell Group Universities will continue to prosper as they tend to favour a more global outlook in their courses and attract the best professors, which is attractive for both domestic and international students.
“As such, there is potential for concentrated growth at certain Universities, which creates a very real opportunity for developers of student accommodation.”
