A leading property consultancy has claimed that too many student property developments are being built in one of the UK’s key cities and that in some locations developers have got their rent pricing wrong and are now struggling to fill ‘beds’.
The comments have been made by David Feeney of Cushman & Wakefield on BBC Radio 4 programme You & Yours.
A report published by Cushman & Wakefield last year revealed that there are now 625,714 bedrooms nationally within build-to-rent style student blocks even though there are only 1.8 million full-time university students.
Feeney has told The Negotiator that the problem in Cardiff, and some other locations around the UK, is that developers need to consider the prices being charged for purpose-built accommodation and greater weight given to their location, or ‘micro location’ planning as he puts it.
“Why would students choose a £180-a-week rental when they can get an £80-a-week in a traditional HMO house nearby?,” he says.
Feeney says the market for student accommodation has swollen massively since the government abolished controls on the number of students in the UK and effectively de-regulated competition between universities, and that overall across the UK demand is outstripping supply.
The challenges of constructing build-to-rent student developments in Cardiff were discussed in detail during the programme, including how 4,000 beds of this kind have been built since 2016 in the city. One development has recently had to be converted into a hotel because of low demand from students.
“A typical market can sustain 10-15% studios but some developers are building on what their appraisal of the market is, rather than actual student demand locally,” he said.
“In most cases it’s just a fundamental misreading of local property market dynamics. For example, in Cardiff a lot of students come from the local area so don’t need somewhere to live.”
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