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  • Student Accommodation

    Significant rise in PBSA affecting landlords?



    There’s been a big rise in the volume of purpose-built student accommodation (PBSA) in the UK, suggesting that the market may be getting tighter for the traditional individually-owned buy to lets aimed at student tenants.

    Knight Frank reports that some 29,000 purpose-built student bedrooms are due to be completed across the UK by the start of the 2019/20 academic year - up 25 per cent from the 23,000 reported in 2017/18.

    The agency’s figures are based on an analysis of pipeline development data across more than 60 university towns and cities in the UK.

    The agency says that private developers will build 82 per cent of the total new student beds due to be completed by 2021, and nearly 90 per cent of the beds due to be built for the 2019/20 academic year. 

    Full/source article 

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    There is no doubt that PBSA has had an impact on traditional student HMO's.

    There used to be two distinct letting periods, the first is from December to February. This is when UK students tend to find their accommodation for the following academic year.

    The second period was from July to September when overseas students come to the UK.

    My letting agent tells me he has seen a sharp decline of applicants in the later period and he thinks a lot of the overseas student are now renting PBSA pods.

    This coupled with S24 and falling European student numbers(Brexit),  has caused me to no longer buy into this market.



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    University-owned PBSA could be a threat in the future if numbers get high enough, but I don't think privately/company owned PBSAs will ever dominate as they are very expensive. The latter does appeal to overseas students but not UK students who seem to be more price sensitive.

    Time will tell of course but when students go into a nice student house they wouldn't consider going back into PBSA unless they couldn't find a group to share with.

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    Heads up for landlords in Leeds:

    Gregory Property Group has announced forward funding and the start of work on one of the country’s largest purpose-built student blocks.

    It’s a 407-bed student scheme on the edge of Leeds city centre; planning consent for the £30m-plus project was given last year. 

    Full/source article

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    This site has loads of info on developments going up around the country: https://sturents.com/news/dev

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    Great thread guys - just seen it. I am watching this topic carefully ie. the threat of PBSA's.

    We all need to be aware of the threat of PBSA...not because they are going to immediately render traditional HMO's obsolete...but because there are just too damn many of them coming to market. They are perfect for 1st year students & overseas students who want to be close to city centres & universities...but dont really appeal to 2nd years onwards...who I believe still want shared houses...but at a significantly improved standard!

    PBSA's are over-priced, have many hidden costs and are driven by greedy developers wanting to pre-sell at inflated prices. Many investors have been lured in by false promises of guaranteed returns. When the initial honeymoon period for the investor is over...lower rents, rising costs, increased competition from over-supply & finally voids will bite hard into yields. And guess what?...its difficult to get out...because there is no tested re-sale market. However, the developer has sold & is long gone...they have their cash & ran...onto the next PBSA devt! In some over-supplied areas...this could become something akin to a ponzi scheme.

    HOWEVER....one serious threat is that this could mean that the PBSA's will drop prices, and offer discounted deals to attract tenants...and that's where I feel the danger is...as this is creating competition. Therefore, IMHO, traditional HMO landlords have to box clever & get smarter. Improve quality & focus on the customer experience...which unfortunately means re-investment. If your house is good quality, well-located & value for money (doesn't have to be cheap!) & you look after your tenants...then I think you will always have a market. The HMO model has changed...it has become a lot more hands-on in my opinion...and needs to be run more like a business!

    My advice for any landlords who are in areas where there are many PBSA's...is "be prepared!" Be prepared to get serious & invest...or think about exiting...as many already are!

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    We are now pretty much at the end of the annual letting period for the next academic year.

    Fortunately, my property let last December.  I was chatting to my letting agent this morning and he told me this year has been terrible and he has 100's of un-let houses.

    He wasn't sure why this is but agreed PBSA must be part of the problem.

    Another student landlord I know in Wales says it's the same there.

    As you say, if the PBSA providers start dropping their prices, student landlords are going to be in a lot of trouble.


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    Hi Dom - yes, we are having to work a lot harder to let for sure...which is why we are having to offer "more for the money"  & get our marketing right.

    However, another reason for the "later than normal" lets this year is also due to the upcoming ban on letting fees on June 1st. I think students are canny & have sussed if they wait till then, they can save on these fees. I therefore think that there will be a late rush in June...which may be too late for many.

    This market is certainly more challenging than it was...which is why we're all having to think harder & smarter. However, I still have faith in our product & strategies & know we will get there!


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    How can PBSA's drop prices much when they have such high costs? Maintenance/staff isn't going to be getting cheaper each year?

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    Great point Adam. I agree that their running costs are ridiculously high...even far higher than they initially budgeted for! However...my point is not that they can afford to or want to drop prices voluntarily...but I think that there is an over-supply, and investors don’t have clue what’s coming.

    i think that after any guaranteed rent periods investors will soon be hit by rising costs & voids and may panic. They will have 2 choices...default or keep dropping prices till they attract tenants. Selling may not be an option...due to negative equity...there will be a very limited re-sale market. They will be trapped, and will have to limit losses.

    Some areas with strong student demand & affordable PBSA’s  (if there is such a thing) may be ok, but other areas with an PBSA oversupply will be hit hard. I suspect the stories will start circulating in the summer when many new devts will be ready.


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    I've heard about a PBSA developer in Cardiff where there is an oversupply, has applied for a change of use to serviced accommodation.

    In the future, I can also see these blocks being leased to councils for use as temporary accommodation.

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