Rising rents pushing students to the limit

Rising rents pushing students to the limit

0:02 AM, 27th October 2023, About 11 months ago 3

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Students are struggling as soaring rents outpace average maintenance loan, according to new research.

A survey by student housing charity Unipol and Higher Education Policy Institute reveals rents for student accommodation have increased by nearly 15% over the past two years.

Bristol has the UK’s highest average annual rent at £9,200 per year outside of London.

More landlords to exit the student market

The average maintenance loan received by English students this current academic year is expected to be £7,590, versus the average rent in England of £7,566.

This means rents swallow up virtually 100% of the average loan, leaving a mere £24 left over for other living essentials, equating to 50p a week.

The new report, warns the Renters’ Reform Bill could push more landlords to exit the student market causing it to shrink further and putting university-owned and Purpose-Built Accommodation under more strain, exacerbating supply issues even further.

Student housing has reached crisis point

Victoria Tolmie-Loverseed, assistant chief executive at Unipol, said: “Student housing has reached a crisis point in affordability, underpinned by these alarming figures. Rents are rising rapidly just as real-terms government support has stagnated.

“With rents consuming unhealthy levels of an average maintenance loan, students are being forced to take desperate measures – illegally doubling up in rooms, taking on increasing amounts of paid work or even avoiding university altogether due to costs.”

She added: “Failing to address the student housing crisis risks undermining decades of progress in widening participation in higher education. We risk excluding those from poorer backgrounds, forcing middle-income students to take on unsustainable debts, and damaging the student experience for all.”

Cities with high rents

The highest rents and increases are in the most undersupplied cities.  Glasgow saw the highest rental growth at 20.4% over the past two years, followed by 16.1% in Exeter and 15.5% in Nottingham.

Other notable rises were seen in Leeds (14.7% rise to £7,627) and Bournemouth (11.2% rise to £7,396). Meanwhile, Liverpool, Cardiff and Sheffield are deemed the most affordable, with lower annual rents of £6,400-£6,600 and smaller annual increases.


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Rod

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14:12 PM, 27th October 2023, About 11 months ago

Classic use of statistics which lack sufficient detail to make the numbers meaningful.

First, let's consider that the period is the 2 years immediately post covid.

Second, there is no clarification of whether is whole market, PRS or PBSA.. I would not be surprised to learn that the purpose built sector has CPI rent increases to satisfy investors, in order to secure funding for building more.

Thirdly, the 15% is over 2 years, so could represent 6.5% followed by 7.6% the following year (14.59% compound) rounded to the nearest whole number.
This in not significantly different from the rent increases paid by existing tenants at a time when new tenancy rates have risen by nearer 13% pa

DAMIEN RAFFERTY

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9:34 AM, 28th October 2023, About 11 months ago

Since December 2021 the Bank of England has raised interest rates from 0.1% to the current rate of 5.25%
This means for many Landlords the costs of Interest only mortgages has increased by 43% and may go higher if the BOE increases rates again.
Student Landlords are having to factor in potential BOE base rate hikes, Higher costs for HMO licence, compliance requirements including New Fire Safety measures, Massive increases in Energy costs. Increased costs for tradespeople and materials.
The Rental Reform Bill allows PBSA to offer Fixed term tenancies to students but Private Landlords do not have the same protection.
This has seen a Hugh number of Landlords leave the student housing market in Scotland and the same will happen in England and Wales unless the Act is amended.
I hope that someone is listening in Government

Grumpy Doug

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9:51 AM, 28th October 2023, About 11 months ago

A couple of my interest only mortgages have quadrupled so a 400% increase. Mandatory licencing coming up again next year so that's another few £ thousands in the bottomless pockets of the local council. Rents have risen near 20% for houses for next September - not surprising really given the blood sucking leeches in both central and local government

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