It is clear that student housing has continued to be a profitable venture for landlords, providing better returns than that of the average buy-to-let property, and with increasing rents and very high occupancy rates. However, growth in the market has slowed.
As a result of the trebling of university fees in many universities, including our very own University of Leeds and Leeds Met, demand for student rental accommodation has gone down in 2012, with university admissions falling by 7%, from 456,581 in 2011 to 425,858 for this academic year. Considering the average tuition fee for universities in the largest university towns and cities is £8,305 per year, it’s no surprise a few are put off.
Research carried out by flatsharing website EasyRoomate has shown that the average cost of renting a room in a student flatshare across the major university towns has grown 3.9% over the last year from £332 per month to £345. Although increased, it is less than the rise for non-student flatshares, which has grown by 7.6% from £409 per month to £440 over the same period.
Jonathan Moore, director of EasyRoomate, said, “The rise in tuition fees and the prospect of a debt mountain on leaving university was the final nail in the coffin for many would-be students. The drop in applications has eased the pressure on student accommodation and this has caused rent rises to slow compared to the wider market. Something that will be very welcome to cash conscious students and parents.”
The research shows that private sector landlords are now offering considerably better value for money than the halls of residence, which could potentially draw more cash-conscious students to the private rented sector. While the average student flatshare cost may have risen 3.9%, the average halls of residence costs have jumped 5.5% (rising from £3,827 last year to £4,035 this year), leaving a student in a hall of residence paying an average of nearly £1,200 a year more.
Jonathan Moore went on to say, “Halls of residence have many advantages and can be a great social hub when first starting out at university. But as the cost of studying climbs ever higher, more and more students will be considering their options in order to save a few pounds.
“Demand for amenities such as wi-fi, en-suite bathrooms and double-beds has caused halls of residence costs to grow faster than average student flatshare rents. While flatsharers don’t tend to get bills and cleaning costs included in their rent, the more people you share with the wider you can spread these expenses. And with the cost of university rising higher each year many students will be exploring every avenue they can to try and save money.”
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