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The UK's purpose-built student accommodation (PBSA) sector has seen significant institutional investment in recent decades. This paper unpacks contemporary trends and perspectives on the sector. It questions whether PBSA has moved from being an “alternative” to “mainstream” residential asset class, framing the analysis through the lens of market maturity.

The methods triangulate perspectives drawn from literature on the evolution of PBSA as an asset class with illustrations of investment trends across the UK between 2005 and 2020 using data from Real Capital Analytics (RCA), combined with findings from 40 semi-structured interviews with investors and stakeholders in PBSA in the UK London is the focus of the work, whilst other regional cities are integrated for comparison.

The results demonstrate that London's PBSA market is ahead of trends currently being replicated in regional cities. However, the regions currently offer greater return potential and opportunities for risk taking compared to London, where yields are compressed, and the market is considered lower risk. The concept of maturity remains useful as a framework for evaluating markets, however a more granular analysis of sectors is necessary to further understand asset classes within sectors. PBSA continues to trade at a premium across the UK; it is considered the most mature residential asset class.

The emergence of PBSA as an asset class continues to play a developing role within the residential sector and UK investment market. Risk, value and local context remain key when integrating PBSA into institutional portfolios, and as the first to consider the UK market from a qualitative research approach, this research provides a snapshot of these influences in 2021.

Our approach offers original insight into investment trends across the UK and is the first to focus reflections on the London market specifically. The research highlights the role of PBSA as a vanguard asset class for investors into residential, situating its growth within the framework of market maturity and drawing out market nuances from interviews.

In recent decades, institutional investment has become increasingly focussed on residential property in the United Kingdom, reflecting interest in what was previously considered an “alternative” asset class, but is now an evolving and ever more complex sector. This short thought piece considers how such processes may be understood through investment-related research.

The UK residential market has experienced substantial capital inflows in the wake of the global financial crisis. This reflective piece suggests there is a need for more research into residential real estate as an institutional asset class to further unpack and understand shifting market dynamics within the United Kingdom. It offers insight into evolving market trends across a diverse range of investors and market sub-sectors.

This paper considers the diverse research opportunities within the residential investment markets, including, but not limited to, the private rented sector, build-to-rent and purpose-built student accommodation, presenting opportunities for burgeoning research.

The viewpoint suggests how this research lacuna may be bridged through additional research in not just the UK residential market, but also how investors may further integrate and operationalise UK residential assets in diversified or specialised investments, from domestic to international propositions. The suggested research agenda promotes enhanced understandings of residential markets and processes driving investment decision-making.

As the integration of residential property into vehicles such as Real Estate Investment Trusts, private equity funds and managed multi-asset portfolios continues to increase, there is an amplified need to understand the market context in which such investment flows occur, including the potential impact of COVID-19, Brexit and the cyclical evolution of real estate markets more broadly.

The purpose of this paper is to validate and quantify the effect of key macroeconomic drivers on London house prices using annual data over the period 1983–2016.

Within this context, the authors estimate alternative error-correction and partial-adjustment models (PAMs), which have been widely used in the empirical literature in modelling the slow adjustments of house prices to demand and supply shocks.

The results verify the existence of a strong long-term relationship between London house prices and key macroeconomic variables, such as UK GDP, London population and housing completions. A key finding of the study relevant to the debate on the causes of the housing affordability crisis is that the results provide little evidence in support of the argument that user demand, which is captured in the author’s model by Greater London population, may have had a diminished role in driving house price inflation in London.

The practical and policy implications of the results are that increased homebuilding activity in London will undoubtedly help limit house price increases. Also, any potential reduction of immigration and economic growth due to Brexit will also have a similar effect.

The originality of this research lies in the use of annual data that may better capture the long-term effect of macroeconomic drivers on house prices and the estimation of such effects through both error-correction and partial-adjustment models.

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade. However, the increase in global uncertainties in recent years due to socio-economic and political trends highlights the need for more insights into the behaviour of international real estate capital flows. The purpose of this study is to evaluate the influence of the global and domestic environment on international real estate investment activities within the London office market over the period 2007–2017.

This study adopts an auto-regressive distributed lag approach using the real capital analytics (RCA) international real estate investment data. The RCA data analyses quarterly cross-border investment transactions within the central London office market for the period 2007–2017.

The study provides insights on the critical differences in the influence of the domestic and global environment on cross-border investment activities in this office market, specifically highlighting the significance of the influence of the global environment in the long run. In the short run, the influence of factors reflective of both the domestic and international environment are important indicating that international capital flows into the London office market is contextualised by the interaction of different factors.

The authors provide a holistic study of the influence of both the domestic and international environment on cross-border investment activities in the London office market, providing more insights on the behaviour of global real estate capital flows.

To apply path dependence theory and analysis to the regulatory framework for private-rented housing in Britain, especially affecting houses in multiple occupation (HMOs) and addressing the increased involvement of the planning system through planning use classes, permitted development rights and Article 4 directions.

This paper identifies critical junctures in primary and secondary legislation for housing and planning and analyses individual local authority responses in planning policy documents and tribunal decisions.

The rise of the HMO reflects wider changes in society leading to new forms of household and inter-generational inequalities. Local authority discretion and locked-in responses have resulted in different regulatory regimes for housing and planning, recently favouring existing communities of owner-occupiers against HMO residents, seen as transient populations not committed to the neighbourhood.

Potential for further research on demographics and household formation, and on reviewing planning and appeal decisions involving HMOs.

The research is apparently the first specifically addressing planning regulation of the HMO from a path dependence perspective, in the context of planning protection of the single-family dwelling house and marginalization of other forms of housing.

This paper aims to contribute to the banking and housing market literature by proposing an alternative measure of rate of return for Islamic banks that is based on the rental rate of the property. This alternative Islamic mortgage pricing mechanism could be adopted by Islamic banks as a replacement for mortgage rates if it is found to be independent from any form of interest rates as required by Islamic law.

By investigating the short run and long run dynamics between rental price index (RPI) and the proposed Islamic Rental Rate (RR-I) and, three selected macroeconomic indicators in the UK via autoregressive distributed lag model, the authors examine the link between RPI, RR-I and the real economy.

The findings provide evidence that while RPI in the UK is significantly related to three leading macroeconomic variables, namely, gross domestic product (GDP), real effective exchange rate and interest rates measures, while RR-I is only impacted by changes in GDP. More importantly, the authors show that there is no short or long run dynamics between the rental rate and any form of interest rates.

This paper did not attempt to investigate the impact of the physical attributes of the rental property to formalize the model describing the relationship between RPI and RR-I. Also, other macroeconomic factors like household income growth, risk, house value growth rate and taxation could be included in future models.

As Rental Rate is not linked to the macroeconomic determinants, it is therefore more stable, resilient and sustainable and, at the same time, making the financing less risky for both parties, as they are less susceptible to economic vulnerabilities.

Some calculations incorporating the proposed RR-I can also be extended to the pricing of products based on other contracts such as Tawarruq, Bai Bithaman Ajil or even Murabahah for a fairer and just pricing to both the banks and customers.

The results suggest that Islamic banks should consider incorporating the proposed rental rate (RR-I) when pricing their home financing products, as this will lead to less dependence on interest rates for benchmarking. In addition, using the proposed rental rate (RR-I) reduces the exposure to the subjective evaluation by property valuators and speculative macroeconomic elements.

This paper aims to propose a new pricing alternative called Rental Rate Index (RR-I) that captures the true value of property to be used by Islamic banks in Musharakah Mutanaqisah (MM) contract for home financing.

By formulating a profit rate based on Rental Index (RI) and House Price Index (HPI), the proposed rate eliminates conventional profit rate benchmarking, and, at the same time, suggests a fair, equitable and sustainable financing. This new RR-I (measured by RPI/HPI) enables computerization of the MM system in home financing to be easily implemented. A financial simulation is developed to demonstrate the feasibility of this newly proposed rate.

This newly proposed RR-I is found to be more stable, having less fluctuations, resilient to macroeconomic conditions and yet comparable to the conventional interest rates, without depending on them. It can also be regarded as a rate that is fair and sustainable to both the customer and the bank, as it measures the actual rate of return to both parties in MM contract.

The paper confines one contract, namely, MM, as it is claimed to be more Shariah-compliant than others.

The finding also sheds some light on the recommendation by Bank Negara Malaysia, which is to consider RR that is more indicative of the actual rental price while taking into account the competitiveness of the product. (BNM, 2007).

This paper wreaks customer patronage in selecting the contract of home financing.

This paper attempts to resolve the issue of benchmarking RR to the conventional interest rate in the MM contract. Studies conducted on this issue via simulation approach are meager.

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.