THE BLOG

The Student Housing Market Is In Crisis

22/05/2017 12:22

The student housing market is in crisis. Poor quality and overpriced accommodation is putting a strain on students pockets and lifestyles and we expect it to get worse before it gets better. With more people entering further education each year we can expect even greater strain put on current student housing stock and increased tenant competition.

Finding a place to live while at university has always been one of the biggest headaches for students around the world. But, with the OECD projecting eight million international student by 2025 - there is now a serious need to rethink about how we're going house the influx of those choosing to study away from home in the coming years.

Cost of living is too high, and the housing market isn't helping
It costs a lot to be a student these days. For example, London is the most expensive student city in Europe - tuition fees on average cost £9,250 per year and that's before you start paying £650 per room per month and your travel £90 per month. In total, it's estimated that one can spend almost £20,000 a year just on having somewhere to stay, study and to travel between the two.

This rising cost of living is something the National Union of Students is concerned about. They've suggested that higher rent prices is piling financial pressure on students. These increased money worries is in part to blame for the rise in student mental health issues since 2012.

What's worse, our own research found that more than half of those interviewed couldn't find anything affordable when they looked for places. And we're not alone in seeing this. Rental prices are so high that The University of Bath is running a Cut the Rent campaign to fight the increased costs of student accommodation.

5* luxury student housing isn't serving the majority of students
The emergence of the privately-owned high-end, serviced student accommodation is not the ultimate solution to the student housing crunch. Last year institutions spent £4.3bn in upmarket halls of residence and were charging £650 per week for a single room. While there is some demand for this type of luxury student living and certain students willing to pay the price, this new type of accommodation does not serve the majority.

Students aren't asking for much from a place to live. When we asked students what they wanted from their accommodation what came back was the basic want of good wifi, a large bedroom and a double bed. Even a dishwasher and a tumble dryer could not crack the top 5 student accommodation desires let alone the desire to have a porter service, a gym and a nightclub on the ground floor.

We need to see more development of affordable student housing that is decent and in a good location and, ultimately, that they can be happy to live in.

So what can be done!?
There's no silver bullet that will overcome this crisis but perhaps here's how we can make some progress:

  • Mobilise empty properties - student housing has been shown to give landlords higher than average rent yields due high occupancy rates. Therefore, landlords who typically let out properties to young professionals and families should also consider opening up to the student market. This will help them reap more financial awards and, should more private landlords open up to students, this will also ease some of the pressures we've talked about.
  • Make it easier for students to find student housing - Students need to be able to easily source and book accommodation. That means creating an efficient market where students can view all accommodation options, and have all the information they need to make a well informed decision on the final property. If this is done right it will help level the playing field for everyone looking for a place to stay.
  • Not rely on the universities to provide the accommodation, it's not their job - universities should focus on providing excellent educational experience and not take the brunt of solving this crisis. In the UK less than 20% of student accommodation is owned or controlled by universities and this is one of the most mature markets in the world. The private sector needs to step up to this challenge.
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