A student housing squeeze means some of those attending the most popular universities have been housed in different towns, miles from campus, according to a report in the Financial Times (FT).
According to the FT, there has been an estimated reduction of 100,000-150,000 beds for students to rent in shared houses since 2021, and higher interest rates and more regulation are leading to small-scale landlords exiting the market.
The paper said there is no evidence that the accommodation crisis will ease; although university applications this year were marginally down on 2023’s figure, they were still 6% above pre-Covid levels, UCAS figures show.
Meanwhile, large providers are pushing up rents. Unite, for example, has forecasted a 7% increase in rents for its 2024-25 fiscal year, and higher rental fees have contributed to a 14% rise in its half-year adjusted earnings to £125.3m.
However, the FT reports that construction costs have also jumped considerably. The paper quotes David Feeney, a partner at Cushman & Wakefield, who said a company will need to achieve weekly rents of around £230 for an en-suite room in order to make developments worthwhile.
Only in certain cities, such as Bristol, Edinburgh, Glasgow and Manchester, where general private rental prices exceed that level, will students be prepared to pay as much as that, the FT argues.
