Over the past few years, there has been a definite shift towards more affordable student housing. Student rents have been increasing on average. This is partly as a result of increasing demand and rising land and construction costs in prime city-centre locations. According to the National Student Accommodation Survey 2019, the average student rent in the UK was £125 per week or £541 per month.
The need for affordability, however, is beginning to be realised across the market as this figure has fallen from £131 per week in 2018. Almost half of the UK still has student rents that are in excess of the student maintenance loan available. This puts significant financial pressure on students. One in three students in the UK state their accommodation is poor value for money, and 50% of students struggle to pay their rent bill.
The cost of deposits
Another issue is with deposits, nationally the average cost is £311 an increase of £10 from the previous year. In addition to this, students paid £119 in agency fees, however with the introduction of the Tenant Fees Act, this should be eliminated from 2019/20 onwards. If a student was required to pay 1 month’s rent upfront, upwards of £970 would be required to begin a tenancy, all costs considered.
Bills
Water, Electricity, Gas and Broadband are likely to be included in rent over 50% of the time, however, 32% of students reported no bills were included in their rental payment. The costs associated with laundry is also an issue, with some students paying around £15 per week to complete the washing and drying of laundry.
The impact of not being able to pay rent
Not surprisingly, 1 in 2 students struggle to pay rent, and this may be having a negative impact on the mental health of students and their ability to study successfully. 65% of students must borrow money to be able to cover rent costs and parents are on average responsible for contributing £2,288 per year to their child’s accommodation costs.
HMOs
These facts have drawn students to begin to live in accommodation provided by private landlords, such as Houses of Multiple Occupation (HMO). These properties are the cheapest option, after living at home, and have an average weekly price of £126. Currently, 54% of all students live in properties from private landlords, up from 50% last year, making it the most popular choice by far. Such properties have grown in number, with a drop in the number of student halls over the same period. University halls offered on average the most expensive accommodation choice, at £137 per week, and have suffered a drop in the number of students residing within their halls.
Landlords can use this information to better place their properties within the market, ensuring that the properties meet the changing needs of the student population. Providing affordable accommodation within 20 minutes travel of a university campus would create make a property most competitive. Being able to offer all bills inclusive rent with a low deposit and minimal upfront cost should ensure that demand for the properties remains high and that full occupancy is achieved.
References
National Student Accommodation Survey. 2019. Accessed 30th October, 2019, from https://www.savethestudent.org/accommodation/national-student-accommodation-survey-2019.html
