Got net-zero news, project updates, or product launches to share? Student rents in UK rising sharply
Students in Glasgow may face significant challenges in securing affordable accommodation in the upcoming academic year, as new data from real estate advisor CBRE suggests that rents are expected to soar. According to CBRE’s analysis of the Purpose-Built Student Accommodation Sector (PBSA) in the UK’s major university towns, rents in Scotland’s largest cities are projected to increase substantially in the 2024/2025 academic year.
In Glasgow, students are likely to see an 18% rise in average rents for an ensuite room, increasing from £200 to £235 per week. This translates to an average annual rent of £11,985 for a 51-week lease. Even with the maximum loan and bursary package available in Scotland set to rise to £11,400 for the 2024/2025 academic year, students may struggle to cover accommodation costs and basic necessities. Average rents for studio rooms are predicted to jump by 25% from £235 to £294 per week, amounting to £14,994 annually.
Similarly, in Edinburgh, the cost of an en-suite or cluster room is expected to increase by 8% from £199 to £214 per week, while studio rents are set to rise by 7% from £285 to £304 per week. This means students could end up paying £10,914 for a cluster room or £15,504 for a studio per year.
Conversely, Aberdeen offers a more stable rental landscape, with the average rent for a room in a shared flat remaining at £138 per week. This amounts to £7038 annually, leaving students with £4,362 for living expenses. However, studio rents in Aberdeen are anticipated to rise by 13% from £183 to £206 per week.
Dundee, on the other hand, is bucking the trend in Scotland with an 8% decrease in the cost of renting an ensuite room, dropping from £172 to £159 per week. Studio rents are expected to increase by 6% to £238 per week.
The constrained supply coupled with a decline in the delivery of student accommodation units to the market has exacerbated rental price growth nationwide. CBRE’s projections indicate a potential shortfall of 620,000 student beds in the market by 2028, compared to the 36,000 beds currently slated for delivery in that period.
Chris Dougray, executive director of CBRE in Scotland, highlighted the disparity in accommodation costs between cities, emphasising the impact on students’ decision-making process when selecting a university. He expressed concern over the looming accommodation cost spikes, particularly in Glasgow, attributing higher rents to a scarcity of available PBSA units in the city.
Tim Pankhurst, head of student accommodation valuation at CBRE, warned that the dwindling supply of student accommodation and rising rental prices could prompt economic migration of university undergraduates across the UK. Pankhurst noted a growing trend where students factor in the affordability of rents when deciding on their preferred study locations.
CBRE’s research revealed that the sale of buy-to-let properties has led to a loss of approximately 10% of the UK’s private rented stock since 2016, impacting student housing availability. Despite this, institutional investors have shown keen interest in the sector, with close to £4 billion worth of investment deals taking place in 2023 alone.
Oli Buckland, head of PBSA investment at CBRE, hinted at improving conditions for investment in 2024, suggesting a potential increase in the supply of student accommodation. Buckland highlighted the importance of leveraging institutional investment to address the growing shortage of student housing in the UK, which is expected to intensify in the coming years.
In conclusion, the housing landscape for students in Scotland is evolving rapidly, with rising rents and supply shortages posing challenges for students seeking affordable accommodation. As institutional investments in the PBSA sector grow, there may be hope for increased supply and improved affordability in the future.
