Property portal StuRents says competition from Build To Rent is, for the first time, impacting student accommodation provision in some parts of the UK. 

In as market snapshot, StuRents says rental growth continues to outstrip maintenance loan growth, leaving students with £8 a week after paying rent, down from nearly £30 in 2021.

Students living in London and South England are affected the most, with rents outstripping maintenance loans by £52 per person, per week (pppw) and £13pppw, respectively

The average weekly rent paid by British students, including utilities, reached £158 per person for both purpose-built student accommodation (PBSA) and houses in multiple occupation (HMO).

Rents in purpose-built student accommodation grew by 8.1% on a like-for-like basis since last year, while rents in shared student houses rose by 5.3%. This is against a backdrop of 1.7% inflation and a rise of just 3% in student maintenance loans for the 2024-25 academic year.

Some 78% of returning British students chose to live in shared student houses (HMO) versus private student halls (PBSA) in 2024-25 academic year, according to StuRents’ property management platform Concurrent.

And 80% of Chinese students chose to live in PBSA, making them the largest demographic group residing in this type of accommodation.  Chinese students are paying a 42% premium over domestic students—averaging £224 per week compared for the 2024-2025 academic year, based on a blended average executed price across all types of student accommodation, including HMOs and PBSA.

UK students’ search budgets for HMO increased by 8.1% YoY to £150 pppw, while for PBSA this growth has only reached 2.5% to £174pppw, which could signal an emerging price ceiling for UK students in the PBSA market. 

Occupancy levels across private student halls reached 91.7% by late September 2024, slightly down from 92.6% a year earlier, suggesting the market has moved from bullish to more volatile.

Planning applications for new purpose-built student halls were submitted for over 30,000 beds, down from over 70,000 in 2016. Some locations that have seen a spike in demand, such as Glasgow, Bristol and Manchester have seen a sharp increase in submission and Nottingham witnessing an increase in private PBSA supply of more than 15% in 2024-25

Only around 11,000 beds will be delivered in 2024, substantially lower than the 37,000 delivered in 2019.

Richard Ward, Head of Research at StuRents, says:“The implications of rising rents are clear: most students undertaking a full-time bachelor’s degree will need financial support or part-time employment to meet their basic needs. This is a worrying trend, particularly as we see no mechanisms for rents to return to previous levels. The reduction in student spending power is now entrenched, underscoring the unaffordability of accommodation for many, especially domestic students.

“To address these affordability concerns, there is an urgent need for a dual approach: increasing maintenance loans to reflect rising costs and committing to a long-term strategy to expand the supply of affordable student housing. Without scalable solutions, the accommodation crisis for UK students will only deepen, placing further strain on their finances and academic experience.”

StuRents says it is becoming increasingly clear that competition from other housing sectors, such as build-to-rent (BTR), is contributing to the student accommodation supply pool, complicating the assessment of new scheme viability in markets with significant pipelines.

BTR accommodation offers an appealing alternative for students seeking more cost-effective housing options, suggests the portal. 

Similar to Purpose-Built Student Accommodation (PBSA), BTR properties are typically centrally located near universities and provide comparable amenities and flexible contracts. However, BTR options stand out for being more affordable while offering larger living spaces, measured in square meters, making them a better value-for-money choice for both new and returning students.