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News: Purpose Built Student Accommodation resilient to Brexit

Student property investment brexit
Jun 24, 2016

Brexit will have a negligible impact on purpose built student accommodation returns, with overseas student applications to UCAS outnumbering international EU students 7 to 1.

 

UK universities not depending on EU for funding

A newly published report from CBRE forecasts that Purpose Built Student Accommodation will be resilient to Britain’s exit from the European Union (Brexit).

According to UCAS, there were 7.3 overseas student applicants in 2015 for every one international EU student. CBRE also points out that only 2.4% of university funding comes from non-UK EU student tuition fees, compared with 12.7% from overseas students.

Brexit property investment analysis

 

Recession proof property form

Purpose Built Student Accommodation shown itself to be recession proof in 2007, with returns unaffected by external factors that influence other property forms. Demand is linked solely to university student numbers, which have continued their sustained upward trajectory since 2007 (UCAS).

With no cap on undergraduate student numbers and globally respected universities able to attract students from around the world, high demand for rooms will continue despite this referendum result.

 

Benefits of short-term sterling slump

Brexit has caused what is likely to be a short-term decline in the value of British currency, but the UK’s exit from the European Exchange Rate Mechanism (ERM) in 1992 points to the many benefits of this.

The reduced value of the pound will be balanced by a rejuvenated export sector. Overseas investors will also be able to take advantage of increased purchasing power, building on the UK’s record year for commercial property foreign investment in 2015.

 

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