An increasing number of students are swapping halls for home as fees and the cost of living bite, according to Unite Group.

The UK’s biggest student landlord reports that at lower-tariff providers (those that accept lower entry qualification standards), about half of students now choose to live at home to reduce the overall cost of university, compared to only 15% at high-tariff providers.

Unite says aging university accommodation continues to impact supply, with 5,000-10,000 beds being removed from the market each year. Meanwhile, supply of purpose-built student accommodation (PBSA) grew by about 10,000 beds in 2025, equivalent to 1.5% growth - significantly below levels of new supply in the period prior to the pandemic.

It expects to see 17,000 new beds in 2026, but explains that the combination of complex planning, increasing regulation, and higher build and funding costs will restrict the delivery of new supply for several years.

Half

Over half of students who need term-time accommodation live in HMOs, according to Unite, where many private landlords are choosing to leave the sector due to rising mortgage costs and increasing regulation, while the ability for students to exit HMO tenancies with two months’ notice will also reduce income security for private landlords. It adds that HMO supply has fallen by 9% over the last four years and expects this trend to continue.

The provider achieved occupancy of 95.2% across its portfolio for the 2025/26 academic year (down from 97.5% in 2024/25) as changing student behaviour at lower-ranked universities and slower leasing following major projects impacted its lettings. Like-for-like rental income increased by 5% during the year, reflecting strong rental growth but modestly lower occupancy for the year.

Drop

A drop in the number of international students coming to the UK has hit Unite, which reports that only 68% of its beds have so far been reserved for the next academic year from September, down on 71% this time last year. However, UCAS undergraduate data for the 2026/27 academic year shows 5% growth in UK 18-year-old applicants.

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