Covid-19 has meant that the last couple of years have been full of uncertainty. This is true of just about every sector and area of the UK, including the student rental market. Lockdowns have forced students to study from their bedrooms, while others found themselves tied into contracts for accommodation that they weren’t even living in.
In this report, we’ve taken a look at exactly what happened to student rental prices in 2021, along with whether maintenance loans are high enough, a regional breakdown of rental costs, how the pandemic affected this, and how the future looks for the student renters.
What’s happened to the student rental sector in 2021?
A report by the National Union of Students (NUS) and housing charity Unipol has found that university accommodation is becoming more and more expensive. When it comes to student halls, these are 4.4% more expensive than last year, and up an eye-watering 16% on pre-pandemic costs.
And it isn’t just a case of university-run student halls being the most expensive option. In fact, privately-owned student accommodation is now 24% more expensive than their university-run counterpart – and this gap is growing.
Below, we’ve listed some of the other big pieces of news provided by NUS and Unipol, most of which don’t look great for student renters:
- Rent costs are rising much quicker than inflation. This means that the percentage of money going towards paying for student accommodation is higher now than it was in the past
- There’s a huge lack of affordable accommodation across the UK. Cheaper university accommodation is disappearing as older rooms stop being used and aren’t replaced
- Most of the accommodation being built by private providers is more expensive than university-run accommodation. These rooms are often beyond what some students actually feel they need, with en-suites and larger spaces being considered the new norm
- Rental costs are becoming more out of whack from actual living costs. Increasingly, maintenance loans don’t provide enough for students to live on
- There isn’t enough accommodation and related services to meet the needs of disabled students
Annual rent costs have gone up for students
So the big question then, is just how much have student rental costs actually risen by in the UK? We’ve summarised the extent of these increases below:
- The average annual rent for privately-owned student accommodation in the UK is £7,374. This is up 4.4% on last year and up 61% on 2011/12. When you consider that this is a 4.9% increase year-on-year for the past 10 or so years, it’s pretty worrying.
- The average annual rent for university-owned rooms in the UK is £6,227. The average for self-catered accommodation is a fair bit lower at £5,157 per year. These figures are up 44.5% on 2011/12 – a year-on-year increase of 3.7% across the last 10 years.
- In London, student rental costs are currently 62% higher than the rest of the country. This massive gulf can be put down to the additional costs of living in the capital, along with a lack of affordable accommodation.
Weekly rental costs have also risen
Yearly rental costs for students have increased, so it’s hardly surprising that university students are also paying more on a weekly basis as well. In the 2021/22 rental year, the average weekly rent in the UK when including all purpose-built university accommodation and providers is £166 a week. In just 11 years, student rent has risen by a staggering 48.8% – almost half!
Not all types of accommodation have risen quite that much. For example, students are paying £13 a week less in university-owned accommodation than privately-owned alternatives. Even though some accommodation hasn’t increased as much in price, rental cost increases are still pretty much constant across the board.
Student maintenance loans aren’t high enough for some
The UK’s average student maintenance loan is £6,900. Meanwhile, self-catered rent in university accommodation costs an average of £5,157 per year and completely private halls cost a whopping £7,264 per year.
All in all, the average annual rent for a student in England based outside of London is £6,707. Currently, paying rent uses up around 72% of a student’s maintenance loan, leaving them with £2,781 across the year. For the 40 weeks of term-time then, students without other sources of income have an average of £69.52 a week to live on. It’s even more tricky in London, where students are left with just £38 a week – in a much more expensive city.
In many cases, the total maintenance loan that students receive doesn’t even cover their rent costs. When this is the case, students either have to look for much cheaper accommodation elsewhere, live at home, work part-time jobs (which many universities discourage), or hope that their parents will provide financial support.
Region by Region Breakdown
Average weekly rents for university-owned and managed student accommodation are as follows:
- London = £212
- South West = £166
- South East = £163
- East Midlands = £155
- East of England = £154
- West Midlands = £150
- Scotland = £148
- North West = £145
- Yorkshire & Humber = £140
- Wales = £133
- Northern Ireland = £120
- North East = £118
Average weekly rents for privately-owned student accommodation are as follows:
- London = £259
- South East = £184
- South West = £172
- Scotland = £160
- East of England = £158
- East Midlands = £150
- West Midlands = £150
- Northern Ireland = £145
- North West = £143
- North East = £143
- Yorkshire & Humber = £141
- Wales = £137
Greater London, the North East, North West, South East, South West and the West Midlands all recorded their highest average rental costs towards the end of this year – meaning they’re continuing to rise.
The pandemic created even more uncertainty
The pandemic created uncertainty in just about every UK sector, and the student rental market was no different. Unpredictability was caused by occupancy levels constantly going up and down, with many students looking to the latest government advice to decide whether or not to get rented accommodation or stay at home.
To try and deal with this, 29% of private accommodation providers dropped their rental prices and 41% offered incentives like vouchers and money-off. These discounts didn’t last though, with prices returning to normal once students started moving away from home and back to their university city/town.
Students did receive some help from universities and private providers. For the 2020/21 academic year, half of the universities that responded to the NUS/Unipol survey said that tenants could end their contracts early if they were no longer living in that accommodation (with around 1-10% doing so). In the private sector, 74% of respondents said that they provided refunds to students across the board. In total, students were given over £140 million in rent refunds.
Not much is being done to help students (so far)
If there’s one thing worth taking away from Unipol and NUS’s report, it’s that there clearly isn’t enough affordable accommodation out there for students.
Private accommodation companies definitely haven’t given any indication of plans to create more affordable accommodation or lower the prices of their existing accommodation. However, some of the larger providers are still trying to innovate by thinking about the next generation of international students and those from non-traditional backgrounds (such as mature students). Hopefully in the future then, we’ll start to see the growth of rental prices slow and maybe even decline as the supply is able to better match the demand.
If there are any plans to make student accommodation cheaper – whether this comes from private companies or the universities themselves – then it probably won’t be happening any time soon. The pandemic has caused huge revenue losses and increased inflation, both of which will make it much harder for accommodation providers to suddenly lower prices and make their properties more affordable.
It’s also been recognised that accommodation providers need to play a much bigger role in supporting the health and wellbeing of students. Student Space’s university search directory allows you to see what support is available at your uni campus.
How will 2022 look for student renters?
According to James Maguire of UK rental guarantor service Housing Hand, the fact that demand is still much greater than the supply of rental properties in the UK means that rental costs will continue to rise in 2022 (especially in the private sector).
As long as the UK doesn’t go back into a total lockdown and completely shut its borders to other countries, international students will continue to return to the UK in large numbers, with the country remaining one of the best places to study. This won’t apply as much to international students from the European Union though, with the effects of Brexit and Covid still causing many to avoid the UK.
We expect something similar with students based in the UK. Many were forced to remain at home during the early months of the pandemic, but more and more are now looking for rental accommodation near to their university.
Source:National Union of Students & Unipol – Accommodation Costs Survey 2021
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