2025-02-10-莱坊-UK_Student_Housing_Q4_2024_5页_831kb

UK Student Property Market Update: Q4 2024 Summary

Investment Flows

• In Q4 2024, approximately £575 million was invested in the UK purpose-built student accommodation (PBSA) market, contributing to an annual total of £3.87 billion, a 14% increase from 2023.
• 2024 saw 66 deals completed, robust activity exceeding the five-year average of 57 transactions.
• Deal times are extending due to building safety regulations, some transactions delayed to 2025.

Development Deals

• Q4 2024 involved nearly 50% of deals for development sites, marking a record year for student land sales in 2024.
• Land prices have fallen 14% since end-2022, impacting deal volumes.
• Developers are capitalizing on a quieter market, while some traditional participants adopt a 'wait and see' approach due to viability issues.

Student Acceptances

• UK university acceptances increased by 2% year-on-year for the 2024 academic cycle.
• Domestic acceptances rose by 3%, driven by an increase in UK-born 18-year-olds; international acceptances fell by 2% but remain elevated long-term.
• Significant growth in specific locations: Portsmouth (+23%), Durham, Birmingham, and Glasgow (at least +9% each).
• Variation noted: Bournemouth, Brighton, and Leicester saw declines.

Supply and New Deliveries

• In 2024, 16,382 new PBSA beds were added across 63 schemes, a 3% increase from 2023.
• Supply remains below pre-pandemic averages (e.g., Nottingham led with 3,639 beds).
• Private sector dominates new beds (81%), with the total UK pipeline nearing 200,000 beds.

Regulatory and Policy Updates

• Regulatory uncertainties, including construction cost inflation (81% of investors see this as a barrier) and planning issues (60%), challenge market growth.
• Government policies: Tuition fees for English undergrads increase from £9,250 to £9,535 from 2025-26, providing short-term relief but insufficient for long-term university finances.
• International student trends impacted by visa policies, with potential shifts to the UK from other countries.

2025 Outlook

• Investment momentum expected to build, with £1.3 billion in transactions under offer, focusing on stabilized or portfolio deals.
• Falling interest rates (Capital Economics forecasts base rate to 3.75% by end-2025) could lower debt costs and improve financing.
• Student demand likely to continue favoring higher-quality institutions and locations, with international students a key focus.