More student accommodation is needed in Cardiff - Study
It's undeniable that Cardiff has a large student population, and with the ongoing growth of all Cardiff-based universities, the need for suitable accommodation will continue to rise. With more students, comes a higher demand for student accommodation, whether offered by the universities themselves or by privately-owned accommodation schemes. While concerns about too many new student accommodation blocs being built and converted in Cardiff have been raised, in fact, it seems that there aren't nearly enough for Cardiff's growing student population.
No room in the student accommodation
The property advisory firm Cushman & Wakefield recently undertook a study to see whether putting money into privately-owned student accommodation in Cardiff would make for a fruitful investment. What they learned may shock those who say that there are plenty of places for students to live in Cardiff.
The reality is, there is space for 14,500 more student beds in the Welsh capital before the market reaches its saturation point! This directly contradicts the fears that some investors had that the Cardiff student market bubble was ready to burst.
There is strong investment potential in Cardiff student accommodation, especially more dedicated investor schemes. Even if you include the number of beds that would come from projects that are still in development, there is still room for around 9,000 student beds across the city.
How many students are there in Cardiff?
Cardiff has an estimated student population of about 78,000, with 14,700 of them being international students. If we assume that first-year students make up roughly a third of this population, that would mean there are 26,000 students looking for accommodation in university-provided halls or in private accommodation schemes.
In June 2016, there were 11,000 beds in these student accommodation blocs, meaning there was a shortfall of 15,000 beds. 8,000 of these beds were found in university-provided accommodation, and the other 3,000 in private accommodation. The 8 student accommodation blocs that are under construction, or have been built since June 2016, will add another 2,452 beds to this total, while the 14 blocs in the development pipeline will add another 3,338, showing that demand for student accommodation in Cardiff is still rife.
What does this mean for Cardiff investors and landlords?
For investors looking to take advantage of this business model, the ethos is sooner rather than later. As more student accommodation blocs are developed, these will then fill a quota, and as the number slowly reaches the demand, it will lead to a rent ceiling, restricting the amount of rent you can charge and remain competitive. As more student accommodation buildings open, the financial benefits of student investment in Cardiff will slowly diminish.
For private landlords on the other hand, this is the perfect time to target students to occupy your property, the demand for accommodation means that many first-years turn to the private rental sector. However, it is worth noting that students are expecting higher-quality accommodation, which many student flats in Cardiff are providing. Bear in mind that by catering to these demands you could see a quick return on investment with more students desiring your property and a higher rent price point.
If you’re a landlord looking to let your property to students, get in contact with CPS Homes today. As one of Cardiff’s largest letting agents and student accommodation providers, we offer a range of property management services to suit your needs. You can contact us online, by phone: 02920 668585 or email: enquiries@cpshomes.co.uk.
The information contained within this article was correct at the date of publishing and is not guaranteed to remain correct in the present day.
