The Impact of Purpose-Built Accommodation (A Norwich Case-Study).

Norwich has long been a popular university city, with the University of East Anglia and the Norwich University of the Arts leading the way in terms of academic prowess. The lure of these universities attracts thousands of new students to the city each and every year, even in spite of recent tuition fee rises, and whilst you may think that for student landlords this presents a great opportunity, the...

Norwich has long been a popular university city, with the University of East Anglia and the Norwich University of the Arts leading the way in terms of academic prowess. The lure of these universities attracts thousands of new students to the city each and every year, even in spite of recent tuition fee rises, and whilst you may think that for student landlords this presents a great opportunity, the recent surge of Purpose-Built Accommodation (PBA) blocks has left many independent student landlords with empty properties.

The old stereotype of student accommodation being dark and dingy homes in need of some serious TLC is simply not representative of the current realities of modern, chic student housing. Students are now willing to pay a premium for their lodging, with the largest percentage of students in a recent survey saying that they would be happy to pay over-the-odds for fast wi-fi, a large bedroom or an on-site gym.

This willingness to pay over-the-odds for student accommodation has not gone unnoticed by investors, who have flocked to invest their cash in the student sector. Jo Winchester, executive director of student accommodation valuation and advisory services at CBRE UK, a real estate services and investment firm, says the first published student accommodation index demonstrates the continued strong performance of the sector.

“UK student accommodation is now firmly established as a mainstream investment sector,” she said. “Investors will find the increasingly sophisticated raft of influences on performance highlighted by this index, including location, asset scale, university rankings, applications, and distance to university very informative.”

Student Developments Norwich

This newfound PBA investment is extremely evident in Norwich city with a spate of development and applications to build student accommodation throughout the city and further afield. One of the largest developments, the former Aviva Towers in St Stephens Street, which will provide a further 700 home for students will be completed in September this year at a cost of £45m.

A further two developments, one next to the Premier Inn in Duke Street and the other for St Crispins House to be converted, have been given approval by planning officers and will provide over 750 further rooms for students in Norwich. If we take in to account just these three developments, then in the next few years there could be an extra 1,500 PBA rooms in Norwich; with the average student house having 3 bedrooms then this would equate to 500 fewer student houses being filled thanks to just 3 developments.

With investors recognising the solvency of the PBA market for students, and students more prepared to pay for a quality environment – especially those who are international students, accounting for almost 4,000 last year across UEA and NUA and more and more students wanting to Live no more than 1.5 mile radius of the University with few exceptions of students who either drive or simply want to be in the City– this has had the result of student landlords unable to find tenants.

Problems

At a time of year when there would be normally very few student properties to let, there are currently over 600 listed on a single property search site, indicating that the formerly lucrative student market has now been flooded due to big investors creating luxury apartment blocks. As there are so many more PBA rooms which will be available in the coming year, this oversupply of student accommodation will continue to hamper student landlords for the foreseeable future; especially when looking at the consistent drop in student numbers year-on-year since 2017.

If you are a student landlord and struggling to let your property, or you are finding it more difficult to achieve a respectable rental yield from your property then contact Melanie Estates today. We can provide you with multiple options, from modernising your property to selling up. Visit valauation.melaniestate.co.uk for a FREE valuation of your Student/HMO property Contact us today on 01603 444 251, or visit https://wordpress-237652-787247.cloudwaysapps.com/ or our Welcome2Norwich WeChat page.