There’s been a surge in rental costs for student accommodation outside London, now averaging £10,227 per year. This is more than the maximum maintenance loan of £9,978 that students can access, making it challenging for those, especially from poorer backgrounds, to afford living expenses.

High Demand & Limited Supply

There’s an intense demand for student accommodation, but less than half (48%) of that demand is met by purpose-built student accommodation. This demand is driven by increasing student numbers in various cities across the UK.

Effects on Students

The consequences are significant: a. Part-Time Work: Students are forced to seek part-time work to afford their studies and living costs. b. Mental Health & Wellbeing Concerns: The financial strain could add to mental health and social wellbeing concerns. c. Limited Choices: Many students face reduced options in terms of study mode, location, and quality of accommodation they can afford. d. Worst Impact on Disadvantaged Students: Those from lower-income backgrounds might face restricted access to higher education or even drop out due to financial pressures.

Student Growth in Specific Cities

Some cities have seen substantial growth in student numbers. For instance, Glasgow has 18,500 more students since 2019/20, and Bristol and Manchester have also seen large increases.

Low Availability of Purpose-Built Student Accommodation (PBSA)

Certain cities like Durham, Southampton, and Glasgow are facing a severe shortage of PBSA for the 2023/24 academic year. In Durham, 86% of buildings were completely unavailable as of May 2023.

Investment Implications:

For investors, this information could indicate several potential opportunities and challenges:

• Opportunity in Purpose-Built Student Accommodation: There seems to be a market gap in supplying purpose-built accommodation to meet student needs, especially in cities with growing student populations.
• Consideration of Social Impact: Investors interested in socially responsible investing may need to consider the impact on disadvantaged students and look for ways to provide affordable housing solutions.
• Market Dynamics: Understanding the cities with high student growth and low accommodation availability may guide investment decisions in those areas.

In conclusion, this article in PropertyWire illustrates a complex scenario where rising rental costs, increasing student numbers, and limited accommodation availability are creating challenges for students, especially those less advantaged. This scenario presents both opportunities and ethical considerations for investors in the UK property market.