The second reading of the Renters (Reform) Bill in Parliament on 23rd October highlighted the woes that the UK’s renters are facing, including students in the private rented sector.
While further discussion around fixed term versus rolling lets for students was clearly needed, MPs’ comments showcased the breadth of the problems that student renters face.
Paul Blomfield, Sheffield Central MP, observed that around 45% of students live in the private rented sector, accounting for some 600,000 young people across England and Wales. Yet the UK’s rental crisis means that suitable accommodation is often not available. According to Sheffield South East MP Mr Clive Betts:
“Last year, Manchester students were actually being encouraged to live in Liverpool, because there was not enough housing in Manchester for them.”
It’s an issue that UK rental guarantor service Housing Hand has seen getting worse over the past few years. As Chief Operating Officer Graham Hayward points out, students – who are the paying client to all concerned – simply want a good standard of accommodation close to their place of study and at a reasonable market rate. Universities, meanwhile, need to be highly populated to make it economically viable to continue to deliver a consistently high-quality education. This is particularly relevant given the variable attendance levels and shifting domestic and international student numbers due to Brexit and Covid.
Accommodation providers felt the impact of those events as well, with many dealing with low occupancy levels while also riding the rollercoaster or regulatory and legal changes. Now they face further regulatory challenges coming as a result of the Renters (Reform) Bill, though the Bill as currently debated doesn’t provide a level playing field, given its different treatment of purpose-built student accommodation and houses in multiple occupation (HMOs).
All of this creates a critical need for more joined up thinking, as Housing Hand’s Graham Hayward explains:
“Universities need strong attendance, so they also need to coordinate with the various stakeholders in the accommodation supply chain, to ensure that planned student numbers can be housed appropriately. This is a market, after all, so if supply doesn’t meet demand then demand may weaken – though it will certainly increase in price until it is rebalanced.”
Regional variations are making the situation more complex. Some UK locations are already at critical points in terms of supply. Housing Hand’s worry is that some international students may look to defer or consider universities in other countries if they cannot find the accommodation they need in the UK. Domestic students may also be driven to defer.
“The UK is currently regarded as a global higher education leader. That position could come under threat if all parties involved in educating and housing students cannot work together to achieve a more balanced solution. To support this, the Renters (Reform) Bill should initially focus on accommodation for the non-student market, giving the student market time to rebalance itself after the Brexit and Covid changes – which it needs to do in short order,” said, Graham Hayward, Chief Operating Officer, Housing Hand
The issue of open-ended tenancies is a key sticking point for the student accommodation market. Having these in place for HMOs could create significant challenges. Students want a start and end date to their tenancies. So do student landlords. A balanced solution is needed to protect and support both parties, providing them with peace of mind and the flexibility to deal with students moving out and in. The requirements of student renters and working professionals are not the same when it comes to tenancy length.
In addition to seeing accommodation providers fretting about the future impact of the Renters (Reform) Bill, Housing Hand has already witnessed the regional issues relating to the current imbalance in demand up and down the UK. As Head of Sales and Business Development James Maguire explains:
“We work with universities, private landlords, purpose-built student accommodation providers and letting agents, connecting them with students and providing rental guarantor services to ensure peace of mind for all parties. In certain cities – Manchester, London and Bristol all spring to mind – we now see students having to live miles from their university, impacting their travel time and costs, as well as the overall quality of their university experience.”
Rising student numbers are exacerbating the issue at the same time as landlord numbers are falling. According to the Cushman & Wakefield UK Student Accommodation Report 2023, London alone has seen international student numbers grow by 27,495 in the past two years. Postgraduate student numbers are on the rise too, with 17 UK towns and cities seeing their number of postgraduates increase by upwards of 300% over the past five years. Such shifts are creating highly localised accommodation demand problems in many areas.
Full-time student numbers overall in the UK hit a record high of 2.2 million in 2021/22 according to the Higher Education Statistics Agency. Cushman & Wakefield reports that the demand pool nationally for student accommodation now stands at just under 1.5 million. Meanwhile, 2023/24 has been the highest year for rental growth, at 8.02% across university accommodation and the private sector (and 9.39% in the private rental sector alone). A declining rate of new bed delivery, which now stands at just 1% per year, is feeding into this along with private landlords selling up and leaving the sector.
“We have seen students starting their courses this autumn facing unprecedented problems in securing appropriate accommodation close to their university. Unless urgent, decisive action is taken to support landlords and make providing rental homes a more attractive proposition, that situation will only get worse. It’s a bleak outlook for young people who are simply trying to get an education.”
Graham Hayward, Chief Operating Officer, Housing Hand
For more information, please contact Housing Hand today on +44 (0) 207 205 2625 or visit https://www.housinghand.co.uk/