With the sharp rise in well-heeled foreign students attending university, it may seem like a good idea to invest in top quality Purpose Built Student Accommodation (PBSA) in university towns. PBSAs are modern and offer a high quality of accommodation compared to the alternative, HMOs. Often en-suite, they provide additional facilities like gyms, games rooms, and are normally managed by specialist operators. They appeal especially to this category of students who, already faced by high tuition fees, don’t seem too fussed about the accommodation costs.
Because, done right, it can be a low risk, high yielding investment and offers an exciting opportunity for the private sector as universities do not have the funds or expertise to address the deficiencies in student accommodation. Furthermore, universities would prefer it if students lived in PBSAs so that they don’t push up costs for other renters. In Brighton, for example, the fact that 20% of houses in multiple occupation are occupied by students is stated to be the main reason why rents are rising by 7-8% per year.