Willis, the world’s third-largest insurance broker, has warned developers and investors are still not fully aware of the risks involved from being active in student accommodation. Although it should be pretty obvious, seeing that the houses and flats they rent will stand empty for long periods of time, as students return home for holiday seasons like Christmas and Easter.
This leaves student landlords more open to break-ins and damage caused by fires, flooding or frost – and therefore higher insurance costs. Not surprisingly, student housing providers naturally want to maximize profits for their investors such as pension companies – attracted by index-linked returns – and private equity funds buoyed by hefty increases in value: consequently growing the sector’s worth to three times the £1.7 billion transacted during 2014.
And it is in protecting these investments where we at Plastic Surgeon come in: increasingly, facilities and maintenance managers at accommodation providers are calling on us to repair damaged items in their student flats: this being far more cost-effective than replacing, say, gouged or burned kitchen worktops, chipped shower trays or even window cills where the frost has caused spalling. Typically, we can reduce the bill to the landlord by two thirds.
According to Addleshaw Goddard’s Education Nation: The Graduation of Student Housing, the sector still has capacity for more investment. Thousands of older buildings need refurbishment, creating new opportunities for investors to enter the market in central locations – as well as for repair specialists like Plastic Surgeon to assist with handovers or maintenance.
Demand for Purpose Built Student Accommodation (PBSA) has soared despite rising student fees and increasing rents. Renters in PBSA have doubled between 2007 and 2014 to 108,000 full-time students, of the UK’s 1.7 million. It still represents a small proportion of the student population and this is why investors believe the sector has a long way to go.