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Raising Storm in Student Housing: The Harsh Reality Faced by Young Hearts




Understanding the UK Student Housing Crisis

The Struggle for Affordable Rental Properties

School leavers in the UK enjoy a few weeks of relief after their exam results. However, for many who plan to go to college, a new struggle awaits. The 1980s British sitcom The Young Ones satirized life in squalid dorms. The quality may have improved since then. But finding affordable rental properties has become extremely difficult, reflecting a broader crisis in the sector.

Unite Group, a London-listed university accommodation company, says the need for new student rooms is now at the highest level for several years. The Unipol charity has warned of a chronic shortage of student housing in certain cities.

Unfortunately for the UK’s 2.9 million students, high demand is unlikely to lead to increased supply. Unite’s 70,000 beds in purpose-built student blocks were nearly all booked by July. In a normal year, around 10 percent would still be available to rent.

The Growing Number of Students

The growth in the number of students is due to demographics and almost record application fees. The number of young Britons turning 18 will increase by 19 percent between now and 2030, according to official forecasts. Demand among foreign students remains strong, particularly for postgraduate degrees.

The insufficient supply of student housing reflects in part issues in the broader buy-to-let sector. Higher interest rates and planned regulatory reforms are pushing homeowners to sell. Purpose-built student housing developers are also building less. The so-called PBSA sector has around 700,000 beds. Through 2020, PBSA developers added more than 30,000 student beds each year.

Construction slowed down due to the pandemic. More recently, financing and supply chain costs have acted as barriers. New additions are expected to be reduced to between 12,000 and 15,000 beds in the next few years.

The Rising Costs of Student Accommodation

Construction costs for student accommodation developers today hover around £95,000 per en-suite room, according to Cushman & Wakefield. These costs have grown from £60,000 to £65,000 in just a few years. For their figures to add up, developers must charge rents of £185 a week or more per room, which is above the more general rental prices in most places.

There are already stories of students who began their university life in hotels or rooms 30 miles from the lecture halls. Some may even be forced to continue living with their parents. Unless there is a significant reduction in developer costs, new students will continue to find that sometimes there is no space in the bedrooms.

A Deeper Look at the UK Student Housing Crisis

The UK student housing crisis is a complex issue with various factors contributing to the shortage of affordable rental properties for students. Let’s explore some key aspects to understand the situation better:

1. Demographics and Application Rates

The number of students in the UK is increasing due to demographics and high application rates. The population of young Britons entering college age is projected to rise significantly in the coming years. This influx of students puts pressure on the already limited housing supply.

2. Issues in the Buy-to-Let Sector

The broader buy-to-let sector is facing challenges, including higher interest rates and regulatory reforms, leading homeowners to sell their properties instead of renting them out. This shift reduces the availability of rental properties, further exacerbating the student housing crisis.

3. Insufficient Supply of Purpose-Built Student Housing

The purpose-built student accommodation (PBSA) sector, which provides dedicated housing for students, is struggling to keep up with the growing demand. The construction of new PBSA developments has slowed down due to the impact of the COVID-19 pandemic and rising costs of financing and supply chains.

4. Escalating Construction Costs

The construction costs for student accommodation have significantly increased in recent years, making it financially challenging for developers to build affordable student housing. These rising costs ultimately get passed on to the students in the form of high rents, making it even more difficult for them to find affordable options.

5. Impact on Students’ Living Conditions

The consequences of the student housing crisis are evident in the living conditions faced by many students. Some are compelled to live in substandard accommodations, such as hotels or rooms located far from their educational institutions. Others may have no choice but to continue living with their parents, limiting their independence and overall university experience.

Overall, the UK student housing crisis is a multifaceted issue that requires comprehensive solutions. From addressing the affordability of student accommodation to incentivizing the construction of purpose-built housing and supporting the broader buy-to-let sector, concerted efforts are needed to improve the living conditions of students.

Summary

The UK is experiencing a severe shortage of affordable rental properties for students. The growing number of students, issues in the buy-to-let sector, insufficient supply of purpose-built student housing, escalating construction costs, and their impact on students’ living conditions have contributed to this crisis.

To alleviate the situation, policymakers, universities, and housing developers must collaborate to increase the availability of affordable student housing. By addressing the underlying causes and implementing targeted solutions, future generations of students can have access to suitable accommodations that support their educational journey.


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School leavers in the UK enjoy a few weeks of relief after their exam results. However, for many who plan to go to college, a new struggle awaits.

The 1980s British sitcom The Young Ones satirized life in squalid dorms. The quality may have improved since then. But finding affordable rental properties has become extremely difficult, reflecting a broader crisis in the sector.

Unite Group, a London-listed university accommodation company, says the need for new student rooms is now at the highest level for “several years”. The Unipol charity has warned of a chronic shortage of student housing in certain cities.

Unfortunately for the UK’s 2.9 million students, high demand is unlikely to lead to increased supply.

Unite’s 70,000 beds in purpose-built student blocks were nearly all booked by July. In a normal year, around 10 percent would still be available to rent.

The growth in the number of students is due to demographics and almost record application fees. The number of young Britons turning 18 will increase by 19 percent between now and 2030, according to official forecasts. Demand among foreign students remains strong, particularly for postgraduate degrees.

The insufficient supply of student housing reflects in part issues in the broader buy-to-let sector. Higher interest rates and planned regulatory reforms are pushing homeowners to sell.

Purpose-built student housing developers are also building less. The so-called PBSA sector has around 700,000 beds. Through 2020, PBSA developers added more than 30,000 student beds each year.

Construction slowed down due to the pandemic. More recently, financing and supply chain costs have acted as barriers. New additions are expected to be reduced to between 12,000 and 15,000 beds in the next few years.

Construction costs for student accommodation developers today hover around £95,000 per en-suite room, according to Cushman & Wakefield. These have grown from £60,000 to £65,000 in just a few years. For their figures to add up, developers must charge rents of £185 a week or more per room, the property group says. In most places, except in cities like London, Edinburgh, Bristol, Glasgow and Manchester, this is above the more general rental prices, which are already in record levels.

There are already stories of students who began their university life in hotels or rooms 30 miles from the lecture halls. Some may even be forced to continue living with their parents. Unless there is a significant reduction in developer costs, newbies will continue to find that sometimes there is no space in the bedrooms.

The Lex team is interested in hearing more from readers. Tell us what you think about the UK student housing crisis in the comments section below.

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