Is there enough student housing for the next cohort of school leavers in September?

A-level students have been working hard for their upcoming exams in May, which will lead some to university in September. However, a student housing shortage could make it difficult for them to find a place to stay.  

The situation has become particularly acute in London. In the capital, there’s only one student bed per four students.

A pandemic slowdown in construction, a challenging planning environment, and affordable rent stipulations have all contributed to a bottleneck of supply in London. 

Plus, universities have simply not invested enough accommodation, partly due to their high debt levels. This has pushed more private companies into the market, and pushed prices up too. 

Purpose built student accommodation has, therefore, been growing, but not fast enough to meet the projected demand. At the same time older university stock has been decommissioned at a rate of several thousand beds a year, according to Knight Frank.

UCAS has projected that by 2030, there could be 1m higher education applicants every single year in the UK. They have dubbed the planning for this eventuality “Journey to a Million”. 

“It is critical that, as we near the huge milestone of having one million student applicants by 2030, we plan ahead for the strain this will inevitably put on the need and demand for student housing… The availability of student accommodation is [often] far outweighed by the number of students searching for a place to live. 

The planning, development and delivery of purpose-built student accommodation takes time, which puts a greater urgency on the need to adequately plan for the expected future growth of the UK’s student population,” Neil Armstrong, Joint Head of Student Property at Knight Frank, said about ‘Journey to a Million’.  

Most students who will be applying for the 2030 cycle haven’t started secondary school yet, but the development of a student housing building takes three to five years, Knight Frank said, making the need to plan for expected growth even more urgent. 

Trying to bridge the student house gap

Dominus is one of the developers trying to meet this shortfall in supply. 

“It’s a good time to enter the market,” Jay Ahluwalia, principal director of Dominus, said. Dominus, which previously focused on hotels and real estate, currently has two student builds in development in London. 

“Demand for student housing is very strong,” Ahluwalia said. Is he concerned about students being unable to pay their rents, even if they can source a room? “We focus on building accommodation for a range of [financial] demographics]… Affordable rooms go very quickly, but so many students are looking for rooms,” he said, and added that he expects demand to continue to be strong in the coming years. 

Under city legislation, 35 per cent of rooms in student developments must be affordable, i.e. priced at 55 per cent of the maximum London student loan. 

Currently, the maximum loan in London is £13,022, meaning each ‘affordable’ room costs around £600 per month. 

Fellow private accommodation developer Scape has been selling rooms in Kings Cross at around £300-£700 per week. Unite Students, which has 32 properties across London, has been renting out rooms from £249 per week. 

Immigration reform 

There was a 37 per cent drop in postgrads from January 2023 to January 2024, driven by a government decision to stop Master’s students from bringing family members to the UK last year.

Could this ease London’s housing crisis as fewer students compete for beds?

Possibly not, Ahluwalia said: “We expect demand to stay at a similar level – although we expect a shift in the countries students are coming from.” He anticipates a higher number of students from the Middle East. 

UCAS data has suggested undergraduate applications may not be affected – 115,730 students from outside the UK applied to start in September, up from 114,910 last year.

Student accommodation ‘content rooms’

In a bid to boost student experience, some student housing developers have turned to a range of amenities like rock-climbing walls and cafes. 

So-called ‘content rooms’ have become the latest amenities to make it onto the planning board. These pod-like rooms are designed to help students record content for social media like Tiktok. 

Senior Marketing Manager at Dominus, Rosie Hill, stressed that these rooms are still “in development” and may not make it to the final design, but adds that they are part of a holistic student experience aimed to meet students’ needs. 

The future of university accommodation seems to be private, on-trend and quite possibly very expensive – here’s hoping it will be enough.