Go back

Rising student rents spell trouble for UK universities


Report says unaffordable rents could leave universities facing recruitment and reputation challenges

A chronic shortage of affordable student accommodation could see universities in some cities struggling to recruit and retain students, research has found.

An imbalance of supply and demand in student housing, and surging energy costs, means that rent rises are outstripping inflation, professional services giant PwC warned in a report analysing data from student review tool StudentCrowd.

Construction costs have soared with inflation, meaning that new Purpose-Built Student Accommodation (PBSA) is becoming increasingly expensive to build as more stringent regulation and planning requirements make the process more difficult.

Up to 95,000 fewer beds

Meanwhile, pressures on house share landlords—such as an increase in regulation and tax burden—have led to a reduction of houses available, which PwC said could mean up to 95,000 fewer beds on the market and an increase in competition among students.

The growing cost of accommodation means students’ maintenance loans “will be insufficient to cover accommodation and other living costs” next year, PwC found. Although inflation has reached more than 10 per cent in the past year, the government is only increasing maintenance loans for students in 2023-24 by 2.8 per cent.

More students will need to find extra income to cover the costs, leading “a larger number of students to seek additional part-time work in order to fund their university studies”, PwC said. This will end up “damaging their academic experience and potential outcomes” and lead them to restrict their choice of university to those in cities they can afford, it warned.

‘No easy fixes’

For universities, the financial pressures facing students could mean “reduced levels of retention and recruitment of students” and trouble meeting widening access targets, reputational damage if students end up having to live far away from campus and poorer scores in the annual National Student Survey.

PwC warned that there are “no easy fixes” to the crisis. “The confluence of factors over the last few years [has] been unique, and in that sense, there is reason to hope that they will not last forever,” it said.

“However, it does not seem likely that the cost and limited supply of accommodation will significantly change in the short-term and in the meantime, this is becoming a prohibitive factor for some students in terms of their access to or experience of [higher education].”

Support from local authorities

To combat the crisis, the firm suggested that universities could work with their local authorities to offer more beds for students or partner with the private sector to boost affordable places in PBSA stock.

PwC identified several cities with the most significant pressure on student accommodation. Since the 2019-20 academic year, the number of students in Glasgow has ballooned by around 18,500, while Bristol has experienced an increase of 10,500 and Manchester one of 10,000.

Glasgow, Bristol and Manchester all made PwC’s top 10 cities with the biggest squeeze on accommodation outside London for the 2023-24 academic year.