Purpose-built student accommodation has quickly become one of the biggest markets in the property sector. Even with apprenticeship schemes offering an alternative route to employment and the ever-growing costs associated with going to university, the UK’s younger demographic are still keen on higher education.
It’s predicted the UK student population will increase by 135,000 by the year 2030, so there’s no doubt that the market is going to keep growing as well.
This is all good news for anyone who works or invests in student accommodation. But remember, the more popular this sector becomes, the more competition you face too.
At some point, the question you’re asking will change from “How do I successfully rent out PBSA units” to “How do I increase PBSA retention rates?”
To ensure your development stays as close to capacity as possible, we’ve listed the top factors below.
Create a Strong Community
Besides the career prospects that come with having a degree, one of the other main reasons people go to university is for the social aspects. Students want to meet like-minded individuals. They want to have a little fun while they’re still in that perfect stage of being “not-quite-a-kid” and “not-quite-an-adult”.
However, Gen Z isn’t as good at forming friendships as you might think. Studies in the US found that 79% of people in the 18–22 age bracket said they see themselves as lonely. When you’ve grown up in a world where technology is essentially your best friend, it can be tough knowing where to start when meeting new people.
In fact, loneliness at university is one of the biggest contributing factors as to why so many students drop out.
The biggest selling point for PBSAs is the sense of community they instill. That’s why 79% of students rated good quality communal and social spaces as important to their wellbeing. A further 82% said organised groups and clubs were also key to reducing loneliness and isolation, according to the 2021 Knight Frank / UCAS Student Accommodation Survey.
It goes without saying that friendship is important. If you help foster those relationships, it will give many students that sense of belonging they’ve been looking for. And when friendship groups form in the building, it gives them a reason to stay, which will increase PBSA retention rates.
This is backed up by the fact that 68% of students in their second-or-more years indicated that living with their friends is important to their overall wellbeing. As long as they’re all in the same building, those relationships can continue to grow.
2020 was a year like we’ve never seen before, and one of the groups stuck in the centre has been the student population. Covid-19 changed the game for many, and with so many students being told to stay in their accommodation for months on end, being proactive clearly had a huge impact.
69% of students in PBSA felt positive about their accommodation’s response to the pandemic, from keeping the students up to date, providing advice and implementing a more rigorous cleaning schedule.
On the other side of the coin, only 25% of students in house-shares and other PRS options said their landlords handled the situation well, with a lack of sympathy surrounding an individual’s financial situations being a key complaint.
When a student moves into your PBSA, they’re putting a lot of trust in your ability to look after them. The fallout of the pandemic has proven that PBSA operators across the UK are caring for the students properly, building faith.
However, in the same way that not all landlords reacted badly to the pandemic, not all PBSAs reacted positively. In order to increase PBSA retention rates, the students have to believe in your abilities as a service provider and they have to know you’re on their side.
Knight Frank & UCAS asked students if they would recommend their accommodation to friends based on how the pandemic was handled. 93% who rated the handling as “Very Positive” said they would make a recommendation. And if they’re willing to go to bat for your PBSA, they’re also more likely to stay themselves.
Value For Money
We can’t shy away from the fact PBSA costs more than traditional student housing options such as Halls of Residence and house sharing. But what we’ve learned over the years is that students are happy to pay more for accommodation as long as they’re getting something in return.
Value for money is repeatedly singled out as the biggest influential factor when students decide where to live. 93% of students this year rated VFM as either “Very” or “Extremely” important to them. However, only 51% rated their accommodation as “Good” or “Extremely Good” value.
Something that’s interesting to note is what students would be willing to pay a premium for. It gives us more insight into what they see as standard in PBSA and what they see as added luxuries.
The top five factors students would be willing to pay more for include:
Fast WiFi (66%)
Larger bedroom (55%)
On-site gym (51%)
24-hour security (45%)
On-site laundrette (42%)
And they would be less willing to pay a premium for:
In-house events (12%)
Game rooms (15%)
Free bike hire (15%)
Cinema rooms (17%)
On-site bar / restaurant / cafe (19%)
Knowing how to increase PBSA retention rates ultimately stems from knowing what students want and delivering on those needs. But seeing everything as a cost to the development is the wrong way to run operations.
We already know that students place a lot of value in becoming part of a community. They expect their accommodation to help with this without it costing more money. Events, games rooms and cinema rooms are where the students will develop friendships, so they need to be widely accessible. Creating a paywall could lead to increased feelings of loneliness, resulting in more drop-outs and less retention.
How To Increase PBSA Retention Rates the Easy Way
Getting your students to stay in your building is a matter of catering to their needs and connecting with them. Amenity spaces are key to developing friendships, which is the main driver in convincing students to renew their lease after the first year.
LOFT has worked on countless PBSA developments in our 18 years, and our portfolio speaks for itself. We understand that students need spaces where they can have fun and relax with each other, giving them that chance to forge strong bonds that can last a lifetime.
From comfortable seating that’s expertly arranged to study areas that encourage co-learning, we’re on hand to ensure students get the most out of your development, giving them every reason to stay for the duration of their course.
To learn more about how our services help to increase PBSA retention rates, contact our team to arrange an in-depth and personalised consultation.
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