A new report highlights static accommodation costs across England in the wake of rising student debt.
An annual report (1) into student accommodation, compiled by Glide Utilities, the student utilities and service provider, has found that private student rent has remained at an average of £100 – £119 a week, for the second year running.
The news comes as a respite for students, who face increasing debts, with the Institute for Fiscal Studies (IFS) last month reporting that students in England are likely to graduate with debts just shy of £60,000. (2) The fourth annual ‘What Students Seek’ report found that 20% of students don’t envisage paying off their loans, a number that is dramatically out of sync with the IFS, which forecasted that three quarters of students will never be able to pay off their loans.
Accommodation represents the second biggest spend for students during their studies following fees. The What Students Seek report found that 72% of students pay between £80 and £139 per week. University locality creates some variance with 15% of London students paying over £200 a week, and 69% of students in the North East paying less than £90 a week.
Almost half, 45%, of students surveyed said their accommodation offers good value for money, but 36% disagree, suggesting that while rents remain static, landlords need to understand students better to attract and retain the best tenants; a growing concern given the continued increase of modern student developments on the market. (3)
The annual What Students Seek report uncovers what students look for when it comes to their accommodation to reveal common themes that could help landlords improve the market appeal of their HMO property.
Key insights from the 2017 report:
Less is more: On average students live with four other people, with 39% sharing with five people or more. However, when asked how many people they’d ideally like to live with, almost half, 48%, indicated they’d like to share with just two or fewer people in their next property.
Switch off the TV: It appears that a television is not going to sway students into renting a property. The majority, 60%, rated having a TV as the least important factor when choosing accommodation. After cost, a fast broadband connection is by far the most important factor for students, followed by good storage space, bills inclusive and double beds.
Management: The majority of students are positive when it comes to the way their property is managed; 57% shared this view. However, almost a quarter, 23%, felt negatively citing the following top issues to be causing problems:
Lack of response on maintenance issues, (37%)
Poor upkeep of the property, (30%)
Lack of communication, (28%)
Bills included: Three quarters of students said that having bills included in their rent was either essential or quite important when considering a property, making this an easy fix for landlords and letting agents in attracting tenants.
Incentives: One in 20 students said they had been given either a cash or non-cash incentive for taking their current property. Although very low, 2% said they had been taken out for a drink by their landlord
The report also revealed the best university cities for landlords to invest in, based on overall tenant satisfaction ratings and annual yield. (4) Although there are great investment opportunities across the UK, university cities in the North East consistently rate highly for both annual yield and tenant satisfaction, with properties in Middlesbrough providing a 16.1% annual yield4 and 82% satisfaction rating. Durham and Sunderland followed close behind while on the other end of the scale, London rated lowest with just a 2.7% annual yield and 76% satisfaction rating.
Outside of accommodation needs, the report also pointed to a decline of the infamous student social life. When asked how respondents funded their social life, almost one in five, (17%) admitted that they didn’t have one. Despite this over a third still rated the proximity to bars and clubs as an important factor when choosing accommodation.
James Villarreal, CEO at Glide Utilities said of the 2017 What Students Seek Report; “It’s good news for students that private rental costs remain static, especially since the price of living in Halls of Residence continue to rise. However, it’s very likely that costs will rise moving forward as the ban of tenant fees will inevitably get passed through to the price of the rent., therefore landlords and agents can offer students greater value for money by offering bills included and ensuring that properties are well maintained and efficiently managed”
What Students Seek was commissioned in April and May 2017 by Glide Utilities. 722 students responded to the report via www.accommodationforstudents.com, the UK’s leading student accommodation website. The full report can be downloaded here.
- Results taken from a survey of 722 students in April and May 2017 as well as year-on-year data obtained from previous surveys and focus groups conducted by AFS.
- From a report by the Institute of Fiscal Studies, July 2017
- In May 2017 the property advisory group, JLL, predicted that 2017 would see a higher amount of investment in the student housing market.
- Average annual yield research taken from the Rightmove House price data, May 2017 and the Student accommodation rent report 2016 (Accommodation for Students). Average weekly rent multiplied by 3 tenants, multiplied by 52. The average annual income divided by average property price, multiplied by 100. Full report available upon request.