Funds seek to buy up university accommodation

Wed 12 May 2010

Halls of residence which are owned by universities may be sold off as one way of focusing attention on core services like teaching and research.

According to the Financial Times, the planned sale of this accommodation by the University Partnerships Programme (UPP) is one sector that funds can look to invest in for guaranteed returns.

With student numbers predicted to increase by up to a quarter in 2010-11, several different funds are preparing to invest in this area as a guaranteed long-term source of income.

It is an area that has already attracted some attention, as Blackstone has committed to two projects in London and US group Westbrook intends to build properties in Wembley, the newspaper reported.

Much of the initial investment is thought to be focused on London due to the high percentage of overseas students who are looking to study in the city.

An increase in this form of housing may influence the number of people who decide to become private landlords, with Tom Entwistle, director of online community LandlordZONE.co.uk, recently warning that the law surrounding the sector can be complex.

Andrea Squires, of Winckworth Sherwood Solicitors, said: "Whilst the outsourcing of student accommodation by universities is not a new idea, it is likely to be of increasing interest as universities seek ways to cut costs, unlock opportunities and seek improvements for students without having to borrow from the bank. The appetite amongst the private sector for investing in such schemes remains strong and general policy development favours the institutional model, but generally costs to students for such accommodation are high and there will be pressure on this sector if and when tuition fees increase."