‘Unprecedented rent rises’ make student accommodation unaffordable
Student finance is failing to keep pace with rent rises, according to a report by a real estate firm.
Cushman & Wakefield found that maintenance loans are failing to keep pace with rising rents, which have jumped by more than 8% since last year.
The firm’s UK Student Accommodation report found that the demand for student accommodation stands at a staggering 1,489,110 students across the UK, with 96.4% of students seeking housing during their time at university across 74 different locations in the UK.
But despite high student numbers, the net increase in beds for the 2023/24 academic year is just 8,760. Cushman & Wakefield said this highlights “a pressing need for more accommodation options”.
The report found that the 2023/24 academic year has seen record-high rental growth of 8.02%, with the private sector experiencing even more significant growth at 9.39%. Glasgow has seen accommodation prices rise the most, with 19% growth.
The average annual private sector rent outside London now stands at £7,632, equivalent to 77% of the maximum student maintenance loan amount.
Affordability a huge challenge for students
David Feeney, partner in Cushman & Wakefield’s UK student accommodation team, said: “Affordability stands as the biggest challenge to the UK’s student housing market, with maintenance loans and grants failing to keep pace with rising rents.
“Persistent inflation means that any loan and grant increases still represent a further real-terms cut. This in turn impacts the UK’s development pipeline, with much-needed beds for students significantly impacted by affordability considerations.”
A report by Interactive Investor last month found that students are feeling the cost-of-living crisis more acutely than the average household. Using inflation and housing rental data from the Office for National Statistics (ONS), the investment website calculated that there had been an 8.7% increase in the cost of student basics over the past year to June 2023.