Affordability remains a huge challenge in student housing market

Affordability remains a huge challenge in student housing market

0:02 AM, 29th September 2023, About 9 months ago

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Students in the UK are facing an “affordability crisis” as rents spiral and supply dwindles.

A report by real estate services firm Cushman & Wakefield reveals rents have rocketed by more than 9% this year, in the PRS.

The average annual private sector rent outside London now stands at £7,632.55, equivalent to 77% of the maximum Student Maintenance Loan amount.

Failing to keep pace with rising rents

According to Cushman & Wakefield, fewer than one in 10 beds in major university cities are now affordable to the average student in receipt of maintenance loans and grants.

David Feeney, partner in Cushman & Wakefield’s UK student accommodation team, told the Guardian: “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.”

An increase of 390,000 students in need of accommodation

In 2016/17, the number of available beds was growing at 5% per annum (a rate well above annual demand pool growth at the time) but has since slowed to just 1% for the last two years, increasing pressure on the housing markets of many large student cities.

According to the survey, there has been an increase of more than 390,000 students in need of accommodation over the last decade.

There are just over 700,000 purpose-built student accommodation beds in the UK for the 2023/2024 academic year, an increase of just 8,760 on 2022/23, continuing the recent decline in new beds entering the market.

No new beds have opened in major strong markets including Glasgow, Manchester, and Bristol (as well as Southampton and Newcastle), with only just over 330 new beds opening in London.

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