For students receiving their A-Level results today, making sure they have somewhere to live when the new university term starts will be a key priority.
Rising university applications have put pressure on rental markets in key student cities across the UK. After two years of a global pandemic, the appetite from domestic and international students to study in the UK remains strong. According to the latest data from HESA, 2020/21 saw the UK’s total full-time student population grow by 8 per cent. 2021 was also a record year for UCAS applicants, reaching almost 750,000. Of these, there were over 560,000 acceptances – the second-highest number of acceptances on record. This year is another bumper year for applications, many students having deferred applying due to Covid restrictions on in-person teaching and socialising.
Now there are 2.2 million full-time students in the UK. With uncertainty around the wider economy, we can expect to see more young people choose higher education over hiring frustration in the years to come.
Our research shows that there is an overlap between markets with lower levels of student housing supply and fewer homes available to rent. In London, for example, there are almost a third fewer homes available to rent than the pre-pandemic average. With 3.5 full-time students for every bed in purpose-built housing, any increase in student numbers will put greater pressure on the wider rental market.
But this is not just an issue in major cities – the same is true in small student towns. Reading may only have 15,000 full-time students, but even so the city only has enough purpose-built accommodation to house half of its university student population. Before the arrival of new students, rental stock in the city is already under pressure, with a quarter fewer properties available compared with before the pandemic.
This month Savills also surveyed lettings agents across its over 60 UK offices to find out more about how student demand is impacting local markets. The majority (83 per cent) of agents reported that student demand has arrived earlier than usual this year (increasing to 87 per cent in London). Across the UK, a third (34 per cent) say that student demand arrived one month earlier than usual, while half (49 per cent) agree that they saw demand two or more months earlier than usual.
With increased pressure to secure a home for the new academic year, 68 per cent of Savills lettings agents reported that either students or their parents had locked into properties by paying rent for the summer months.
As student numbers continue to rise, and fewer landlords enter the market, it seems unlikely that this pressure with ease soon.
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