Students face 24.5% reduction in rental lettings ahead of the academic year

According to the latest research conducted by Savills, there are a quarter (24.5%) fewer homes available to let across the UK’s top 30 student cities since before the Pandemic despite the number of full-time students increasing by 6.3% over the same period.

Related topics:  Rental Market,  Students
Tabitha Lambie | Editorial Assistant, Property Reporter
21st August 2023
"Ensuring students can be accommodated close to their chosen university, for their full university experience, is vital for retaining the sector’s favourable reputation."
- Toby Parsloe, research analyst at Savills

Although London has the most purpose-built student accommodation (PBSA) beds in the UK, there are still 3.8 students for every bed in the capital. This exceeds the UK average of 2.9. Likewise, the capital’s private rented sector faces almost a third few properties available to let compared to pre-Pandemic levels and rent prices have increased by 12.8% in the past year.

Unfortunately, this problem isn’t limited to major UK cities, with key regional universities also struggling to accommodate their growing student body. For example, Durham has been revealed as one of the most stock constrained university cities in the UK with three-bed listings decreasing by 41.8% and four-beds by 32.4%.

Meanwhile, Canterbury experienced the highest annual growth in the number of full-time students, increasing by 24.1% between 2020/21 and 2021/22, despite a 33.2% decrease in student lettings compared to its pre-Pandemic average. Bath has experienced similar annual growth in student numbers, rising by 18.7% since 2020 while rental listings have reduced by 35.2%.

In cities where competition for rentals is fierce, even more pressure is being placed on already rising rents. Overall, 10 out of 30 cities have witnessed double digit annual rental growth. For example, Glasgow has experienced the most significant rental growth at 33.5% since the Pandemic, followed by Salford (29.3%) and Nottingham (28.9%).

Commenting on these findings, Toby Parsloe, research analyst at Savills, has said:

“As students across the country digest their A-level results, the excitement will be building as many prepare to head off to university. However, many will face growing challenges in finding a place to live as continued high levels of university applications are putting increased pressure on already competitive rental markets.

“The UK has a record 2.3 million full-time students, 91,000 more than last year. UCAS applications have remained elevated since the pandemic, as economic uncertainty has pushed many younger people towards higher education to make them stand out in an increasingly competitive job market.”

Parsloe continued: “Issues with undersupply in the UK student rental market have been bubbling for many years, but are becoming even more prominent with signs of private landlords selling up in response to rises in interest rates, reductions in tax relief, and the fact that many who bought when buy-to-let took off in the early 2000s are now reaching retirement and looking to sell.

“With the university-aged population projected to grow over the next decade, and even as more students opt to study in their home cities, there is a need to deliver more purpose-built student accommodation to tackle the competition for housing that students currently face.”

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