There are a quarter (24.5%) fewer homes available to let than before the pandemic (Q2 2023 vs Q2 2017-19), according to Savills’ research of the UK’s top 30 student cities. The number of full time students has increased by 6.3% over the same period.
“As students across the country digest their A-level results, the excitement will be building as many prepare to head off to university. However, many will face growing challenges in finding a place to live as continued high levels of university applications are putting increased pressure on already competitive rental markets,” says Toby Parsloe, research analyst at Savills.
“The UK has a record 2.3 million full-time students, 91,000 more than last year. UCAS applications have remained elevated since the pandemic, as economic uncertainty has pushed many younger people towards higher education to make them stand out in an increasingly competitive job market.”
“This number is likely to grow further,” continues Savills’ Toby Parsloe. “A population bubble is set to increase the number of young Britons reaching university age and the country’s world class higher education institutions continue to attract students from around the world.”
While London has the most purpose-built student accommodation (PBSA) beds in the country, there are still 3.8 students for every bed in the capital, far above the UK average of 2.9.
At the same time, the capital’s private rented sector faces almost a third fewer properties available compared to pre-pandemic levels and rents that have increased by 12.8% over the past year.
But this problem isn’t limited to major UK cities, key regional universities are also struggling to accommodate their growing student body. Durham is revealed to be one of the most stock constrained university cities, with three-bed listings down -41.8% and four-beds down -32.4%.
Canterbury has experienced the highest annual growth in the number of its full-time students (24.1% between 2020/2021 and 2021/2022), while its listing are down -33.2% compared to the pre-covid average. Bath has also experienced significant annual growth in student numbers (18.7% between 2020/21 and 2021/2022), while rental listings are down -35.2% compared to the pre-covid average.
In places where competition for rentals is particularly fierce, more pressure is being placed on already rising rents. In total 10 out of the 30 cities have witnessed double digit annual rental growth.
Of the 30 student cities analysed, Glasgow has experienced the most significant rental growth (33.5%) since the start of the pandemic, putting further financial pressure on student budgets, followed by Salford (29.3%) and Nottingham (28.9%).
“Issues with undersupply in the UK student rental market have been bubbling for many years, but are becoming even more prominent with signs of private landlords selling up in response to rises in interest rates, reductions in tax relief, and the fact that many who bought when buy-to-let took off in the early 2000s are now reaching retirement and looking to sell,” concludes Toby Parsloe, research analyst at Savills.
“With the university-aged population projected to grow over the next decade, and even as more students opt to study in their home cities, there is a need to deliver more purpose-built student accommodation to tackle the competition for housing that students currently face.
“UK higher education is a strong sector with impressive global reach. Ensuring students can be accommodated close to their chosen university, for their full university experience, is vital for retaining the sector’s favourable reputation.”
