Tuition fees rising. Unemployment on the horizon. It is little wonder than university applications from UK students have fallen by 8.7 per cent this year.
Indeed, fees now cost up to £9,000 per year. In a time of deficit, UK students are less keen to pile up debt. And although unemployment has fallen in the last three months, according to the ONS, the number of young people (between the age of 16 and 24) looking for a job for over six months has climbed by 30 per cent in the past year.
But there is good news for investors in student housing, according to Assetz, as overseas students save the day.
Despite the economic deterrents for domestic students, international students are more eager than ever to get behind a British desk, reports the buy-to-let specialist. Indeed, the British Council forecasts an additional 30,000 overseas students enrolling on UK university courses by 2020, a 10 per cent rise this decade.
"International students are used to paying for their education and despite steep rises in tuition fees, the UK remains highly competitive compared to other popular destinations such as the United States," explains Stuart Law, Chief Executive of Assetz.
As a result, the NUS has reported a shortage of accommodation, creating strong competition for purpose-built student housing. This has pushed gross yields to 8, or even 10 per cent, almost twice the average yields in the wider buy-to-let market.
Indeed, research by Knight Frank highlights the fact that regional university cities are currently outperforming Central London's market; a sign of just how strong student demand across the country is.
This consistent nationwide interest led UK student accommodation to account for more than £740 million worth of capital in 2011, according to CBRE. But sales of student accommodation so far this year have already generated £763 million, Jones Lang LaSalle revealed this month. And as investment continues to increase, turnover from the sector is predicted to hit £2.3 billion by the end of 2012.
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