From education to employment

Increasing demand and rental costs for student accommodation create barriers to higher education

  • Manchester and Glasgow have seen the largest swell in student numbers coupled with the highest rental increases for student accommodation across UK cities
  • Durham, Southampton and Glasgow are amongst the ten cities with the lowest privately-owned Purpose Built Student Accommodation (PBSA) availability for the 2023/24 AY
  • Average annual rent for private student accommodation outside London for the next academic year is £10,227, outstripping the maximum maintenance loan of £9,978.
  • Larger number of students seek additional part-time work in order to fund their university studies, damaging their academic experience and potential outcomes.

As students prepare for the new academic year in September intense demand for accommodation coupled with growing rental costs risk impacting the student experience, especially for those from lower socioeconomic backgrounds, according to analysis by PwC and StudentCrowd. 

PwC analysis, using the latest StudentCrowd data, a student review and Higher Education sector insight tool platform, explores trends in the student accommodation booking cycle and rent increases for privately-owned Purpose Built Student Accommodation (PBSA) across the UK, including particular university cities. PBSA is residential accommodation that is specifically built for occupation by students, and can either be privately operated or operated by a university.

Of the 2.27 million full-time students in the UK around 1.42 million require accommodation with an estimated 30% of the UK’s total full-time student population currently living in PBSA. However, with only 678,000 PBSA beds available in the UK, demand is outstripping supply, with less than half (48%) of demand able to be met by PBSA. 

Growing student numbers, from the UK and internationally, have resulted in a swell of students in certain cities. For example, universities across Glasgow have seen around 18,500 more students since the 2019/20 academic year (AY), and Bristol and Manchester have seen increases of 10,500 and 10,000 students respectively. 

Durham, Southampton, and Glasgow have the lowest PBSA availability for the 2023/24 AY, with Durham already seeing 86% of buildings completely unavailable as of 25 May 2023. This means that from a total of seven PBSA buildings in Durham, only one had at least one room available in May this year. In Glasgow, Southampton and Manchester all three cities show material difference between the number of buildings available for 22/23 and 23/24 suggesting that students have to book earlier to secure a room in those cities that had severe shortages of PBSA for 2022/23 AY.

Damien Ashford, education leader at PwC, said: 

“Many students may face limited choice in relation to the mode and location of their studies, coupled with reduced access, choice of location and quality of accommodation they can afford. This may add to existing concerns over students’ mental health and social wellbeing, and more students are likely to be unable to manage financially. The most disadvantaged students will be hit hardest, leading to narrowing access to higher education and increasing dropout rates.”

Cost of living

With students facing rising costs of living, without a corresponding increase in maintenance loan levels, the cost of accommodation will, for some, become a prohibitive factor in accessing higher education, impacting those from under-represented groups the most.

The analysis shows that in the UK the average minimum price paid by a student per week for a privately-owned PBSA bed has been increased from £200 in January 2022 to over £240 in May 2023 – therefore increasing at a significantly higher rate than the Consumer Prices Index including owner occupiers’ housing costs (CPIH) over the same period. 

Of the cities in the report, Manchester saw the highest rental increases as the average price at May 2022 (for the 2022/23 AY) was £220 per week compared with the average price at May 2023 (for the 2023/23 AY) of £266 per week (21% year on year increase). Similarly, in Glasgow the average price at May 2022 was £197 per week compared with the average price at May 2023 of £234 per week (19% year on year increase). In comparison Oxford has experienced more modest rental increases year on year with an average price at May 2022 of £279 per week compared to £301 per week in May 2023 (8% year on year increase).

Rent increases outstrip inflation

PwC’s analysis shows that assuming the current demand and supply imbalance persists, there is a strong likelihood that student accommodation rents in a number of cities across the UK will continue to grow at a rate well above prevailing inflation. 

StudentCrowd data reveals the average annual rent for private PBSA in the 2023/24 AY outside London is £10,227, outstrips the maximum maintenance loan available for students from England living away from their parents/guardians of £9,978. The average annual rental price for private PBSA in London in 2023/24 AY is £19,706, which far outstrips the maximum maintenance loan available for students living in London (living away from their parents/guardians) is £13,022.

Karen Best, education and student accommodation corporate finance director at PwC, added: 

“There are no easy or fast fixes that do not come with considerable compromises, whether financial or that adversely impact student experience. However, from what we see there is widespread motivation across all market participants to relieve these pressures. We believe there are opportunities, particularly in locations where demand is already at a crisis point or may be in the near future, for universities to work with both the public and private sector. In our view, this collaboration will be essential to finding innovative ways in the short, medium and long term to tackle accommodation shortages and affordability challenges.”  

Paul Humphreys, CEO of StudentCrowd, said:

“A student’s accommodation experience has a major impact on their ability to thrive at university. In most cases, students enjoy an excellent experience in Purpose Built Student Accommodation (both university-owned and private). We see this in the average review score for accommodation: 4.3 out of 5 in 2023 so far. However, the sector must pull together to provide affordable accommodation across all cities in the UK. We hope this report adds a new angle in the search for solutions.”


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