Research out today shows that, in a third of British towns with large students populations, the amount that students are prepared to pay for a room is lower than the average room costs. The research, conducted by a website which helps people find rooms to rent, found that in many of the top 25 towns and cities with universities what students were able to afford was significantly lower than what rooms were being rented out for.
Rents in the UK have been increasing for over a decade, caused by a combination of higher house prices – which forces more people to rent for longer – and a lack of new build homes. While high rents have become an issue for everyone, they are hitting students particularly hard. Work is hard to come by in this economic climate and employers are reluctant to take on temporary employees, meaning students are unable to earn extra income to cover the increased rents.
Many are turning to their parents for help. Others either unable to, or too proud to ask for assistance, are taking out credit to pay the rent. Credit cards and overdrafts have been the traditional ways that students borrowed money while studying, but ever more students are also taking out short term finance products such as payday loans.
This problem is particularly acute in towns where what students are willing to pay is significantly lower than the price of rooms in houses of multiple occupation. For instance in Exeter students are generally looking to pay a maximum of £300 per month for a room, while average rents in the town are £385.
Another related problem for students is the traditional 10 month rental period is quickly disappearing. With an increase in young professionals renting rooms, landlords are no longer prepared to go without rental income in the summer months. Landlords therefore are forcing students to pay for a whole year like their in-work counterparts. As student finance is related to term dates, students have no extra loan or grant to cover this summer rental period. Those who are unable to secure summer jobs will often get into financial difficulty.
The problem is unlikely to get better any time soon. Landlords of student houses have been increasing rents across the country, with over a quarter increasing the rent in the past year compared with just 6% who decreased the rent in the same period. London and Coventry saw the biggest rises. Not all towns are the same though with Cardiff and Bristol seeing significant drops in student rental prices.
There’s currently a boom in construction of purpose-built student accommodation by large developers who specialise in student accommodation such as Unite, Mansion Student and Nido. However the prices of these specialist rooms and flats are usually far higher than market rates. In some towns, these developments are almost exclusively populated by overseas students who often come from wealthy backgrounds and can afford these luxury flats. For home students, this building boom isn’t impacting the supply of student houses in their price range and thus hasn’t done anything to keep rents down.
Many students are choosing universities close to home to avoid having to pay for accommodation. At the same time others are opting to go to universities in towns with lower rents. However even in towns with deflated property markets such as Swansea the typical student is paying £250 a month in rent, which takes up more than half of the maintenance loan available.
Some universities are responding to the problem by building their own student accommodation. Sadly much of what is being built is far from suitable for student needs. UCL’s newest student block on the Caledonian Road won the Carbuncle Cup due to the architectural solution of including a historic facade a few feet away from another wall where the windows didn’t match up. This lead to many of the rooms lacking sufficient light for students to be able to work in them.