Inflation Proof Sector! – NEWCASTLE Purpose Built Student Accommodation
UK Housing Market Climbs £2.7trillion in a Decade!
NEWCASTLE has the greatest percentage of student housing throughout the whole of the UK.
Analysis shows that one in every 15 homes within the city of Newcastle is now a student property, a figure matched only by Exeter.
Furthermore, the rate is about ten times (10X) greater than the UK national average for local authorities.
Newcastle is home to two large universities and has seen a massive rise in its student population over the past two decades.
The number of students in the city is thought to have risen to nearly 100,000 since 2001 according to the latest figures from the Higher Education Statistics Agency (HESA) when the total was 25,271.
“Students at Newcastle’s two universities contribute an estimated £500 million to our economy each year and attract young people from all over the world to our city,” said Cllr. Ged Bell, cabinet member for employment at Newcastle City Council.
“Students themselves make a really important contribution to the local economy – with many continuing to live and work here after their studies – and our universities are major employers.
“It is great to see our universities thriving and as more young people come to study here it is important that there is sufficient student housing to meet demand.
“As well as ensuring there is sufficient student accommodation, we also seek to ensure there is a balanced mix of housing, including family housing, within our communities. As part of our plans for growth in Newcastle, we expect there to be an additional 21,000 homes in the city by 2030 and have already seen record levels of housing development in the last two years.”
UK Property Rental Market Forecast Q4 2022
The UK’s rental market is now the world’s fourth-largest by total volumes of privately rented properties according to research from a major lender.
Only the United States, Germany and Japan have more privately rented homes.
Across the UK there are estimated to be over 29.5m homes within the current property market – of those, it claims 8.7m are now privately rented.
According to Jonathan Samuels, chief executive officer of Octane Capital, “the buy-to-let sector is a serious business. Privately rented properties not only make up a third of all homes in the country, but they also provide housing for many, many more tenants who are priced out of homeownership due to high property prices.
“We could see the UK start to catch the other frontrunners as long-term renting becomes more prevalent as a lifestyle choice.
“This is already a commonplace occurrence in nations such as Germany where nearly half of all homes are privately rented in order to satisfy this demand. Should we see a similar trend emerge in the UK, there’s no doubt that the buy-to-let sector will continue to swell in size.”
As we look to Q4 of 2022, many investors are re-examining their current assets and considering what the future could hold for UK property – usually a common investment vehicle in many portfolios.
With news breaking in 2021 that renting was officially cheaper than buying in terms of monthly payments, the rental market has continued to grow from strength to strength.
It is expected that rental prices will grow by 19.9% by 2025/26, as the UK market continues to grow alongside increased demand.
Strong regional performance
Savills predictions suggest that the North of England and the Midlands will be the leading regions for growth in England over the next four years – seeing 28% and 24% price increases respectively.
Going forward, growth in the UK – particularly in regional cores is seen as a booming sector.
Will affordability pose a problem?
More and more individuals in the UK are being impacted by the challenge of the rising cost of living. As people’s budgets shrink, it is unclear if this will start to effect UK real estate prices, but Nick Leeming (joint founder of Propertyfinder, the UK’s first national property portal) anticipates strong demand will keep prices steady.
“It would be naïve to assume that affordability issues won’t have an impact on the housing market in the coming months”, he said.
“It’s largely believed that by this year’s end, interest rates will rise to 3% and inflation will reach 11%, affecting homeowners with tracker and variable mortgages the most.
“Interestingly, rumours of tighter affordability testing have been recently quashed suggesting the government is keen to do all it can to support property transaction growth. Although house prices will remain resilient into 2023, it will be the lending market that will likely dictate the fortunes of many.
“Whilst higher interest rates are likely to rein in housing demand, more supply is needed to even out the scales and keep transactions buoyant. This is in the form of new build properties but also encouraging the sale of under-occupied houses by supporting downsizers and the rising costs of moving.”
first published by Digital Zeitgeist: 30/06/2022 & 07/07/2022
updated by Digital Zeitgeist: 13/07/2022