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A property investor’s guide to student accommodation in Stoke

Invest in Stoke-on-Trent
Mar 9, 2017

This guide discusses all aspects relevant to student property investing in Stoke-on-Trent.

In it, you will discover the economic drivers behind Stoke’s projected growth and the key factors that make this vibrant city a sought after  student destination, as well as introducing Stoke’s two globally recognised universities.

Contents

Click on the above links to jump to the category or scroll down to look through the property investment guide:

 

An overview of Stoke-on-Trent

Stoke Inward Investment

Stoke-on-Trent is a city in the North West of England made up of six separate towns which were confederated in the early 20th century. The city is known affectionately as “The Potteries” because of its long-standing reputation in the world of ceramics.

Stoke was the European City of Sport for 2016, and is a UK City of Culture nominee. It is also one of Britain’s greenest cities, with over 1,380 hectares of gardens, parklands and open public spaces.

The city is also only half an hour away from the Peak District, one of the country’s greatest natural attractions and a popular National Park. Visited by over 10 million people each year, the Peak District contains 1,600 miles of public rights of way including 64 miles with disabled access.

Stoke offers an ideal shopping experience. The high street is home to a wide range of nationally recognised brands, as well as the newly redeveloped three-storey Potteries Shopping Centre.

The Cultural Quarter is a hub for art and entertainment venues in the city centre. It contains The Regent Theatre and Victoria Hall, two stately venues that host events direct from Broadway and the West End.

Excellent connectivity

Stoke’s central location means that no other city has better access to so many UK destinations. Manchester, Liverpool, Chester, Birmingham, Sheffield, Derby, Wolverhampton, Nottingham and Leicester are all within an hour’s drive time.

All major road and rail routes cut through Staffordshire, meaning that 90% of the UK’s population live less than four hours away. Fast and frequent trains take you to Manchester or Birmingham within half an hour and you can be in London in just 90 minutes.

East Midlands, Liverpool and Manchester international airports are all less than an hour away by car.

 

Stoke’s economic development

Stoke top investment destination

Stoke-on-Trent is recognised as the UK’s second fastest growing local economy over the last five years, with key features that include:

  • More than 3 million people living within an hour’s drive time
  • A local population of over one million, with 683,000 working age adults
  • 179,500 of the working age population educated to degree level (NVQ level 4)
  • 2013 was a record year for start ups with more than 4,400 new businesses
  • Manufacturing alone employs nearly 50,000 people
  • A high workforce training participation rate of 19%, particularly in production industries
  • Top 10 city for private sector employment growth 2011–2012 (Centre for Cities)
  • Top 10 European Micro City of the Future (Financial Times)

While Stoke’s prosperity used to be based on pottery, coal mining and steel, its focus today has shifted to the service and distribution industries. Current major local employers include:

  • Bet365: a leading global gambling company with 19m+ customers in two hundred countries
  • Michelin: a global top three tyre manufacturer.
  • FedEx: a US multinational courier delivery services company with a turnover of £230 million
  • National Veterinary Services: the largest UK veterinary wholesaler, with an annual turnover of £406m
  • Sumitomo Electric Wiring Systems: a Japanese electronics manufacturer, with 240,000+ employees worldwide
  • JCB: the world’s third-largest construction equipment manufacturer
  • Jaguar Land Rover: revenue of £19.39 billion in 2014
  • Amazon: the largest internet-based retailer in the world by total sales and market capitalisation

Popular investment location

Stoke-on-Trent strong investment location

Stoke’s Local Enterprise Partnership (LEP) is recognised as the third best in the country for attracting investment, and the fourth for job creation. Its work is aimed at 50% economic growth and the creation of 50,000 new jobs over the next decade.

The latest figures released by the Department for International Trade in 2016 show also that 18 new foreign direct investment projects became operational in the last year, creating 1,094 new jobs – a marked increase on delivery during the previous year.

This reflects the performance of the wider West Midlands region, which attracts the most foreign investment in the country outside London.

“This is certainly good news for Stoke-on-Trent that all our hard work over the last few years is beginning to pay off. The city is certainly well placed now to attract further investment and we have all the right things in place to attract traditional and new manufacturing industries into the city.

We have a reliable and innovative work force, excellent connectivity to the rest of the country and a ‘can do’ approach to attracting new industries and enabling existing small and medium-sized businesses to expand and grow. In addition, we are determined, through our education system, to invest in our schools and colleges to provide a comprehensive skills base to support our businesses and enable our economic growth to continue.”

– Councillor Janine Bridges, Cabinet Member for Economy and Education, Stoke-on-Trent City Council

University Quarter

The University Quarter is a joint initiative between the city’s local council and higher education institutions, and exemplifies the importance of education to Stoke. It is part of a strategy to attract 17,000 more students to the city over the next decade – a 75% increase on current student numbers.

Covering 400 acres, this newly opened £282 million initiative represents the largest collaborative project for higher education in the UK. This investment has rejuvenated the city centre and is encouraging further commercial and residential developments in and around the city centre. 

 

Two highly respected universities

Stoke-on-Trent is host to one Higher Education Institution, Staffordshire University. Keele University is also located in the nearby town of Keele, and sits well within the city’s catchment area.

Staffordshire University

Staffordshire University investment

Staffordshire University is home to 14,750 students in Stoke, spread across its Leek Road and College Road campuses.

This institution is a pioneer of two year fast-track degrees and is working to create an award-winning, teacher-led environment with a focus on employability and entrepreneurialism.

The University has decided to concentrate most of its activities in Stoke on Trent and only the highly rated nursing and midwifery degrees and other courses in paramedic and public health will remain on the Stafford campus. These plans to centralise operations in the city saw 3,000 students transferred to Stoke in 2016.

£42 million have been invested in the campus over the last 2 years, with a further £285 million going towards the state of the art multi-institution city centre campus.

Current multi-million pound investment includes the New Science Centre, the Epic Games Centre, a pedestrian walkway to connect the 2 campuses and a Centre of Excellence for nursing courses.

Keele University

Leading university investment location

Keele University has nearly 10,000 students in Stoke-on-Trent and has invested £115 million in its two campuses over the last decade.

The university is a top 4% global university and is ranked 34th in the country. It is recognised by UCAS as one of the fastest growing universities in the country. It tops a range of league tables:

  • University of the Year for Student Experience (The Times and The Sunday Times annual University of the Year awards, 2017)
  • 1st for Student Satisfaction 2014, 2015, 2016 (National Student Survey)
  • 1st for Student Satisfaction with Course (Guardian University League Table, 2017)
  • 1st for Employment(HESA – Destinations of Leavers from Higher Education, 2016)
  • 1st for Affordability (marbles.com, 2016)

Local student property market

Stoke-on-Trent is home to 22,700 students, enrolled at Keele University and Staffordshire University.

Limited accommodation options mean that they are reliant on private accommodation options in a city where strict legislation limits student access to residential housing.

This large population has access to just 4,779 units in Purpose Built Student Accommodation (including university-owned halls of residence). At 21%, student access sits considerably lower than the UK average of 27% (Knight Frank).

At 15.9%, the city’s proportion of overseas students is three times larger than the UK average (Knight Frank) – a key demographic for Purpose Built Student Accommodation.

 

The case for investing in student property

Secure student property investments

PBSA has consistently been the top performing, highest yielding UK property sector since 2011. It was awarded World Class Asset status in 2015 by the Wall Street Journal and in the same year, a record £4.2 billion was spent on PBSA – 40% more than the previous peak in 2012 (Savills).

Higher education is an important part of Britain’s economy, with around 130 universities providing first degree and postgraduate courses for nearly 2.5 million students.

The student population has been increasing steadily over the last decade and a half, and even more so since the government’s removal in 2015 of the cap on numbers. The summer of 2016 saw an all-time record intake of students for the next academic year – 424,000 of them, an increase of 3% according to UCAS.

A degree from a UK university is highly prized around the world; so much so that more foreign students travel to Britain for their higher education than any other country after the USA – last year we welcomed nearly 430,000. They obviously need somewhere to live and, with the pound struggling as it is, the exchange rate helps them with premium rental rates.

Serious undersupply of PBSA

However, there is a chronic shortage of purpose built student property – in fact, 74% of students are unable to find a room in a purpose built student block. This is inevitably leading to levels of demand that simply can’t be satisfied; for the investor, however, it means occupancy levels of 99% (CBRE) and high yields.

Modern student expectations are high; they demand comfortable, well-equipped accommodation with all their social and academic needs on the doorstep. They expect an extensive range of onsite facilities, both communal and individual, and they want their daily lives to be as care and stress-free as possible. PBSA offers all this, for which many are prepared to pay a premium of up to 40%. 

Exceptional value for overseas investors

With the post-referendum pound dropping to a 30-year low against the US dollar, and putting up a weak performance against the Euro, overseas investment in UK property in general and in PBSA in particular represents the best value for generations. 

 

Introducing Q Studios Student Property

New build Stoke student property investing

With 300 highly sought after student studios and a range of quality onsite facilities, this development is sure to be in high demand from both property investors and tenants alike.

This is our 17th UK Student Property in an exclusive partnership with the only NHBC-certified student property developer – award winners for build quality.

This ensures high standards throughout, while providing buyers with the enhanced security of a unique 10-year structural warranty.

A professional onsite property management team will be responsible for all operational aspects of the development, leaving you to receive a completely effortless income.

Investment highlights

  • 10% NET fixed yields: every year for 10 years
  • Effortless income
  • 10-year independent build warranty
  • Optional 5% interest on deposited funds during build
  • Buyer interests aligned with developer
  • Available from £69,950

Download your Investor Report today.

 

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