Student numbers have certainly increased over the last decade. Student enrolments, including both undergraduate and postgraduate, have increased from 2,503,010 students in 2010/11 to 2,751,865 in 2020/21. However, this growth is 9.9%, which means that it is a higher proportion of students now living in community facilities, not just a higher number.
Graham Hayward, Chief Operating Officer, Housing Hand, says: “The new census figures reflect a growing student preference for communal facilities. Over the past ten years we have seen demand grow, particularly for purpose-built student accommodation, which offers student renters a more lifestyle-focused approach to accommodation.”
More broadly, there are a number of problems on the not-too-distant horizon. According to StuRents, the UK is on track to face a shortage of around 450,000 student beds by 2025, based on the firm’s analysis of the number of new beds likely to be delivered by then, compared to the growing number of students.
The situation is further complicated by a number of rapidly changing factors, according to the British rental guarantee service Housing Hand. CEO Graham Hayward points out that the UK was the first major international education hub to recover from Covid, with competition in Australia and the US lagging behind in terms of recovery. This has led to higher short-term popularity in the UK for overseas applicants for university places – a large proportion of whom are looking to communal facilities such as halls of residence or purpose-built student accommodation (PBSA) to meet their housing needs.
Graham explains: “After several years in which universities courted UK students harder due to disruptions to international travel, the accommodation sector is struggling to catch up with this renewed focus from overseas applicants. This makes sense from a funding point of view as international students pay higher fees, but there is still the possibility of disruption as well. Let’s not forget that China, second only to India in the number of students sent to the UK, still faces significant challenges from Covid.”
Another hangover from the pandemic is the disruption to the supply of new homes in the PBSA sector. Supply chain disruptions were felt across the construction sector in terms of timelines, while global factors also drove material prices higher. With multi-employee landlords quickly closing up shop in the UK due to changes in legislation, this is causing major headaches when it comes to the supply of student accommodation.
James Maguire, Head of Sales and Business Development, Housing Hand, comments: “The student accommodation market currently has to react dynamically to a whole range of changing factors. Universities are looking at ways to make the student experience more accessible to international applicants, such as partnering with Housing Hand to remove barriers to renting in the private rented sector to maximize their higher fee potential. Some universities also work with accommodation providers further away from campus with arrangements to cover transport costs in the short term. We’ve seen it in Bristol, York, Edinburgh, Glasgow, Durham and various other UK cities.’
The cost of living crisis has thrown another wrench into work, leading an increasing number of young people to question the value of getting a degree. Many are instead exploring the potential of apprenticeships where they can work and learn at the same time. They can develop skills and experience in the workplace while gaining their qualifications, with a more than likely guaranteed job at the end of the process – and without having to take on tens of thousands of pounds worth of debt.
James concludes: “The result of all this is pressure on everyone involved – universities, accommodation providers and individual students and their families. University halls, PBSA providers, HMOs and landlords in the private rented sector will all play a key role in the future of the UK’s student housing sector. In light of current economic pressures, guarantors will also pay. It’s a complicated situation.”