Five Themes That Will Shape the Future of Student Property Markets

Posted by Knight Frank Newcastle on 3rd May 2023 -

With over 20,000 completed responses from both current students and new applicants, this year’s Knight Frank/UCAS Student Accommodation Survey offers a rich insight into the role accommodation plays in the overall student experience.

There are 2.2 million full-time students in the UK, according to the latest data from Higher Education Statistics Agency (HESA), up by 4% year-on-year and by 26% over the last decade. 2021 was also a record year for UCAS applicants, reaching almost 750,000. Of these, there were over 560,000 acceptances – the second-highest number on record.

Growth in student numbers is forecast to continue. UCAS is predicting that by the end of the decade there could be up to a million higher education applicants in a single year. Our own forecasts point to total undergraduate numbers increasing by 263,000 over that same time.

Such growth will put pressure on an already undersupplied student housing market, as well as putting the quality and value of that accommodation under the spotlight.

Our previous survey work - undertaken in partnership with UCAS - has highlighted the important role accommodation plays in the student experience. This year we received more than 20,000 responses from both current and new students across the UK giving us a unique insight into the preferences and concerns they have when it comes to their housing requirements.

Below are five key findings from the report:

1. Students are satisfied with their accommodation, particularly those in purpose-built schemes

The majority of students continue to report that they are satisfied with their accommodation. Those living in private PBSA or university-run halls were the most satisfied with their accommodation with 84% indicating this was the case, up from 82% last year and 78% in our 2020 survey.

An increase in the levels of satisfaction from residents living in private PBSA illustrates that investors and operators are building stronger outcomes for students through high quality service provision and scheme design.

2. Cost and value top of the agenda

While PBSA is generally perceived as more expensive than living in a privately rented house share, the overall cost per annum is fixed and inclusive of all bills.

Our survey results indicated that students welcome the sense of financial security this provides, as they do not need to worry about defaulting on bill payments caused by rising energy costs, but against a backdrop of soaring inflation and spiralling energy prices, cost has leapfrogged value for money as the most important factor influencing decisions on where to live. Some 62% of respondents to our survey rated Cost as being ‘extremely important’ to their decision making, with a further 31% saying it was ‘very important’.

3. Accommodation choices can have a positive impact on wellbeing

High quality accommodation underpins positive outcomes for students as reinforced by the survey findings. Some 80% of students said that their current term-time accommodation and home whilst at university is important in supporting their own wellbeing and mental health.

Students also ranked the quality and usability of the social and amenity space highly. Indeed, accommodation plays a crucial role in supporting and providing students with a solid base from which to succeed academically.

4. ESG is rising up the agenda

There is a growing awareness from students towards Environmental Social and Governance (ESG) agendas. Despite identifying environmental factors as an important consideration in decision making on where to live, students were not particularly willing to pay an additional amount in their rent for features that reduced the impact of their accommodation on the environment.

Only 17% indicated that they would be willing to pay extra for technology that made their building more environmentally friendly, whilst just 13% said they would pay extra to live in a building that is carbon neutral. Whereas social factors to support student wellbeing featured heavily in student choices and are translating to price premiums.

5. Brand can be a key differentiator

Brand will be a key differentiator in attracting more second and third year students to PBSA, as operators start selling a “lifestyle”. Today’s students have grown up in the experiential economy, where goods and services are sold by demonstrating the effect they have on consumers lives.

Students want good quality accommodation that offers good value for money, but additional focus will be on the degree to which accommodation choice enhances and improves outcomes for students. In total, 52% of new first years living in private PBSA said brand recognition was a factor in their decision of where to live, rising to 60% for second or more year students.

Read this article on Knight Frank website

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