Average student rents now eat up all of maintenance loan – survey

The UK’s student accommodation market has reached “crisis point”, it has been warned, with rental costs now matching the total value of a maintenance loan in England.

A survey of 10 university cities across the UK, published on 26 October by the student housing charity Unipol and the Higher Education Policy Institute (Hepi), puts the average rent for 2023-24 at £7,475, up by 14.6 per cent in just the past two years.

In England, the average annual rent now stands at £7,566, effectively taking up all of the value of the average maintenance loan, which is worth £7,590.

“If you aren’t working or you haven’t got some family support or hidden wealth, then you really won’t find it feasible to live, and the government really needs to have a look at that,” Martin Blakey, chief executive of Unipol, told Times Higher Education.

“Certain types of poorer students – without that level of support – will find it impossible to live in some of the more expensive university cities, which often happen to be [home to] some of the better universities.”

The 10 cities surveyed for the report – which excluded Edinburgh and London – account for a fifth of the national student bed total, with the highest rents and increases in the most undersupplied cities.

The average rent was highest in Bristol, at £9,200, followed by Exeter (£8,559) and Nottingham (£8,427). The sharpest rise since 2021-22 was in Glasgow, where the average rent was up by 20.4 per cent to £7,548, while rents in Nottingham were up by 15.5 per cent.

Mr Blakey said these figures were bad news for universities that wanted to attract the smartest students and not just the richest, but he added that institutions in more affordable cities could be set to benefit.

Liverpool, Cardiff and Sheffield were found to be the most affordable because of healthier supply levels, with lower annual rents of between £6,400 and £6,700 and smaller annual increases.

Source: Unipol/Hepi

The survey found that the rising costs of energy, construction, staff and borrowing were by far the biggest drivers of rental prices among both private and university providers.

Researchers found that fewer beds were being brought to market – and these were often more expensive so that providers could recoup the increasingly high development costs.

With the country at a “crisis point” of affordability, according to Nick Hillman, Hepi’s director, maintenance support needed to be increased at least in line with inflation, and ministers had to rebase it from evidence they had gathered as part of the Student Income and Expenditure Survey.

Campus resource: How to chart a course through crisis

“For the longer term, we need measures to encourage the supply of new student housing, which is currently restricted by factors such as higher interest rates and confusion over new regulation,” he added.

Unipol and Hepi also called for more affordable options, including double-occupancy rooms, to be provided – but warned that private providers were unlikely to take on the risk without the support of universities and the broader sector.

“It is easy to pin the affordability issues on providers, but they too are under pressure to cover increasing build and running costs,” added Mr Blakey.

“Meanwhile, the planning system does not currently see the economic or political value in allowing more student accommodation schemes to be built, impacting the sector and students alike.”

patrick.jack@timeshighereducation.com