Student Housing Challenges Intensify as Demand Surges and Supply Shrinks, According to Savills Research

In light of the latest findings from Savills, the landscape of student housing in the UK is undergoing significant shifts, marked by a 24.5% decrease in available rental homes compared to the period before the pandemic (Q2 2023 vs Q2 2017-19). The research, focusing on the top 30 student cities in the UK, reveals a complex interplay of factors that are shaping the housing options for the growing student population.

Amid the backdrop of a 6.3% increase in full-time students over the same period, the student housing market is facing unprecedented challenges. Toby Parsloe, a research analyst at Savills, highlights the mounting difficulties for students seeking accommodations, noting that the surge in university applications is intensifying pressure on already competitive rental markets.

Parsloe further explains, "The UK's student population has reached an all-time high of 2.3 million, with an additional 91,000 students joining last year alone. The sustained elevation in UCAS applications post-pandemic reflects how economic uncertainties are prompting more individuals to pursue higher education to enhance their prospects in an increasingly competitive job market."

This trend is poised to continue, Parsloe predicts, as a demographic swell is on the horizon, propelling the number of young people entering university age and fostering a continued influx of international students to the UK's renowned higher education institutions.

The challenges are not confined to major cities like London. Regional universities, which play a significant role in the country's education landscape, are also grappling with accommodation shortages. Durham, for instance, emerges as one of the most constrained university cities, facing a staggering 41.8% decline in three-bedroom listings and a 32.4% drop in four-bedroom listings.

Canterbury has experienced a notable 24.1% growth in full-time student numbers between 2020/2021 and 2021/2022. However, the city has witnessed a dip of 33.2% in its rental listings compared to pre-pandemic levels. Similarly, Bath has seen an 18.7% increase in student numbers over the same period, while its rental listings have decreased by 35.2% compared to the pre-covid average.

As the scarcity of housing options intensifies, rental prices are facing upward pressure. A total of 10 out of the 30 cities analyzed have witnessed double-digit annual rental growth. Glasgow stands out with the most significant rental increase (33.5%) since the pandemic's onset, followed by Salford (29.3%) and Nottingham (28.9%).

Toby Parsloe underscores the gravity of the situation, attributing the challenges to various factors such as rising interest rates, changes in tax relief, and aging landlords looking to sell their properties. Parsloe advocates for a proactive approach, suggesting that an increase in purpose-built student accommodation is necessary to alleviate the intense competition for housing.

In conclusion, Parsloe emphasizes, "Satisfying the housing needs of the growing university-aged population is imperative for maintaining the sector's positive reputation. The demand for suitable accommodations must be met with strategic initiatives that account for the shifting dynamics in the student housing market."

The findings from Savills serve as a clarion call for stakeholders to collaborate and innovate in order to address the evolving landscape of student housing in the UK.