0:04 AM, 2nd July 2024, About 2 days ago 3
Text Size
University students in Britain face a growing affordability crisis as rental costs for purpose-built student accommodation (PBSA) outpace the rise in maintenance loans – putting some universities out of reach for many.
New data from CBRE reveals that student rents are surging, with some cities exceeding loan limits.
Also, student landlords leaving the sector has led to rents rising more quickly.
The real estate advisor’s report, which analysed purpose-built student accommodation (PBSA) across major university towns, found big rent rises compared to maintenance loan growth since 2018/19.
Outside London, average en-suite room rents have risen 27%, while studio rents have climbed 37%.
Meanwhile, maintenance loans have only increased by 18%.
Tim Pankhurst, the head of student accommodation valuation at CBRE, said the drop in student accommodation supply and growing rent prices could soon encourage economic migration of university undergraduates in the UK.
He said: “Historically London has been the only UK city where the affordability of student rents hasn’t aligned with the available maintenance loan.
“However, we’re now seeing this same trend play out across our key regional university towns.”
He adds: “As maintenance loan growth lags and the cost of attending university grows, we could see a shift in where they choose to go.
“More than ever, the cost of living is becoming a key decision driver for domestic students when deciding where to apply to study.”
London students face an even bigger burden since the average en-suite room costs more than the maximum loan available, with studios exceeding it by a significant margin.
The situation is exacerbated by a lack of student accommodation.
CBRE predicts a potential shortfall of 620,000 beds by 2028, with new bed spaces lagging behind student population growth.
The decline of shared housing options (HMOs) has further restricted supply, pushing up prices.
CBRE identifies a decline in buy to let properties and a fall in HMO licenses as contributing factors to rising student rents.
It says that 10% of the country’s private rented stock has been sold since 2016.
Also, the number of new PBSA beds delivered each year has fallen significantly compared to historical averages.
Mr Pankhurst explains: “The loss of House in Multiple Occupation (HMO) homes has constricted supply further, driving up prices for existing accommodation and PBSA beds.
“Some universities are struggling to house their students in the same city.”
He added: “We need to encourage the development of student accommodation and increase its provision, so it’s affordable and accessible for all students.”
However, there is a glimmer of hope as CBRE highlights continued investor interest in the student accommodation sector, with nearly £4 billion invested in 2023 alone.
Universities are also increasingly partnering with private developers to address the growing demand.
Previous Article
Labour’s housing pledge faces a reality check
Fred M BARRETT
12:19 PM, 2nd July 2024, About 2 days ago
Student accommodation is fairly and politely represented here. It is ripping off possibly naive students and their families who only want what is best for them. Purpose built student accommodation PBSA runs at 50% more than the cost of a 90s built 2 bed house here in a sought after postcode in Derbyshire. We have had excellent (and different) student tenants and their partners for the last 5 years though it is a bus ride from the uni. With increasing lectures being online and face to face only 2 - 3 X a week it has not been an issue for them. They have been great and can stay 12 months of the year and not have to leave during vacations. They mus have guarantors but this has not been a problem so far. Partners are not very welcome at PBSA and nor is the odd cat as a pet. The partner's wage and no need for a separate address makes it all soooo much easier for the students. Is PBSA really such a good bet when it comes with such a big price-tag and restrictions?
Paul Essex
12:54 PM, 2nd July 2024, About A day ago
Weird how PBSA good, HMO bad is the perceived mantra; yet PBSA is way more expensive.
Old Mrs Landlord
17:43 PM, 2nd July 2024, About A day ago
Reply to the comment left by Paul Essex at 02/07/2024 - 12:54Same reason Build to Rent is good but individual landlords bad - they add to the housing stock but wcked, selfish private landlords just steal properties from first time buyers as far as the government, the media and tenants' lobbying groups are concerned. Haven't you got the message yet? Useful scapegoats, bogeymen and cash cows, that's what we are..