investing in student property

Will Uncapped Student Numbers Benefit Those Investing In Student Property?

In December 2013 the Chancellor George Osborne announced in his budget that the cap on student numbers would be scrapped. So is this a positive sign for those investing in student property ? The most obvious answer is yes, as the uncapping and in theory the increase in student numbers, will create a strong and sustainable demand for student accommodation.

These changes will be introduced in two stages starting initially with the government funding an extra 30,000 places in the next academic year. Following this an extra £35m will be made available in 2015/16 and an extra £50m in each of the three following years. In 2015 the cap on student numbers, which applies to all universities will be removed. This revolution in the university process will only apply to England and will not affect universities in Wales, Scotland and Northern Ireland, as they are independently controlled by their regional assemblies. The consequence of these changes is that universities will be able to recruit as many students as they want a positive sign for those looking to buy a student property.

George Osborne spoke of his concerns that about 60,000 young people a year that had the grades to study missed out due to the “arbitrary cap” on numbers. “That makes no sense when we have a far lower proportion of people going to university than even the United States,” he continued, “Access to higher education is a basic tenet of economic success.”

The funding for this investment by the government is reported to have come the sale of  what is known as the old student loan book with the sale of the remaining 17% of mortgage-style loans taken out by students between 1990 and 1998. This is reported to involve £890m of student loans being sold to a debt management consortium for £160m.

Mr Osborne in his speech added: “This year is also the 50th anniversary of the Robbins Report, which challenged the nonsense that university was only suitable for a small few.” In 1963, Robbins said that courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so. “That was true then, I believe it should remain true today.”

Barring the Russell Group of universities these changes were positively received with the Chief Executive of Universities UK, commenting : “More graduates are good for the economy, developing a strong society and improving the lives of individuals. Employers tell us that they will need more people with graduate-level skills in the coming years.”

So with these changes just around the corner we will see increased competition between the universities and a focus to offer the best lecturers, facilities and courses at all universities. This provides an opportunity for the private sector to provide exciting new university accommodation that will complement the offering by the university and assist the university in attracting good student numbers. Whilst these developments can be seen as favourable for those investing in student property choosing the right property is still vital, as not all universities may benefit from these changes . The popularity and reputation of the university are important with some courses currently oversubscribed. Investment in facilities, research grants and performance in league tables, are also worthy of investigation as well as the current housing being offered. Investment Property Consults are due to launch an exciting new student project shortly and are also happy to offer guidance those looking to invest in student accommodation.

Categories: Students

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