The purpose-built student accommodation (PBSA) sector is increasingly tuning into investor demand for completed schemes in a model that suits all parties, says Housing Hand.
In the PBSA sector, investor appetite has accelerated significantly over the past year. Knight Frank’s H1 2024 UK Student Housing Market Update details an investment of £2.45bn in H1 2024, up from £1.1bn in H1 2023.
“The PBSA and model is proven. Appetite from renters for high-quality homes with on-site amenities is strong and sustained, while development and operational costs leave scope for healthy profits. It’s a model that suits all parties, from investors through to end customers – the students and working professionals who live in these homes.
“Now, it’s time to build at scale to meet investor demand for completed schemes. That includes getting the payment of rent arrears in better order and aligned to leading practice.”
Graham Hayward, Managing Director, Housing Hand
Q2 2024 alone attracted £1.7bn of investment in PBSA – over 50% more than the first six months of 2023.
Key to attracting investment and delivering healthy returns is stability. With a growing appetite for fully operational schemes, it’s also important for operators to lease up and achieve that stability as fast as possible.
“We provide cost-effective operational efficiencies. Debt recovery companies charge 10-15% of the debt for their services and can take months to deliver. Using our efficiency model instead, PBSA and BTR operators simply email Housing Hand when a renter defaults, trusting in our record of 100% payout on all valid claims.”
James Maguire, Head of Sales and Marketing, Housing Hand
Additionally, a Knight Frank report also points out that affordability remains the leading concern, with 69% of students indicating that PBSA offers a more appealing choice, particularly in light of rising living costs.
Knight Frank also estimates that by the end of the decade, PBSA will accommodate the majority of second and third-year students, offering significant opportunities for investors and developers.
“Delivering fully operational PBSA and schemes that appeal to investors means ensuring that every element of the scheme runs efficiently.
“Ensuring that rental income flows as it should, and that any void properties can be let as fast as possible, are key to assuring investors that a scheme is operating smoothly.”
Graham Hayward, Managing Director, Housing Hand
Housing Hand works directly with operators, landlords, letting agents, private student halls and universities. They currently have over 3,000 partners and have helped over 80,000 students.
The company also offers a lifeboat service where renters can take a planned break from paying rent for a month – without affecting their relationship with their landlord or damaging their credit score.
