University affordability in the South has worsened as maintenance loans now fail to cover student accommodation rents, says CBRE. The company analysed the purpose-built student accommodation (PBSA) sector in the UK’s 30 major university towns and London.
Southampton and Brighton have the highest average rents. These range from £210 to £285 per week and £285 to £341 per week respectively. Students in Winchester pay an average of £215 to 274 per week.
Outside of London, the maximum maintenance loan that can be secured by each student is £10,227 per annum. However, in Southampton, the average rent for an ensuite room (where kitchen/living space is shared) is £10,500 per annum. A studio (fully furnished accommodation, with own kitchen and bathroom) is £14,200 per annum.
In Brighton, the average rent for an ensuite room is £14,250 per annum, and for a studio, it is £17,050 per annum. Average weekly rents for student accommodation across the South have been continuously rising over the past four years.
“What we are seeing in the market reflects the limited good quality student accommodation to house the growing number of students. The Build to Rent schemes in our university towns and cities have gone some way to alleviate the pressure and have provided additional quality housing mainly for overseas students, but there is still a lack of good quality accommodation. We have also seen some secondary providers filling in for the PBSA sector.
“With numbers of students expected to rise over the next few years, we expect to see the development of student accommodation increase to accommodate these growing numbers. It’s important that our university towns and cities in the south remain attractive to students, to ensure there is a qualified talent pool for employers. The availability of accessible accommodation is fundamental to this.”
Emma Eaglestone, Senior Director, Living Valuation and Advisory Services at CBRE Southampton
Southampton has around 30,000 students with approximately 13,700 dedicated student beds. The average weekly rent for a studio has increased by 50% since the academic year 2021/22. For an ensuite room, it has increased by 40% (from £149 in 21/22 to £210 in 24/25).
In Bournemouth, where there are approximately 19,000 students, the weekly average rent ranges from £197 to £250. Students are now paying 27% more a week for a studio (£197 in 21/22 vs £250 in 24/25) and 25% more for an ensuite room (£158 in 21/22 vs £197 in 24/25).
In Winchester, there are nearly 9,000 students and just 3,000 dedicated student beds. The average weekly rent for an ensuite room has risen by as much as 24%, from £173 per week in 2021/22, to £215 this academic year
In Brighton, students are now paying 21% more a week for a studio (£282 in 21/22 vs £341 in 24/25) and 24% more for an ensuite room (£230 in 21/22 vs £285 in 24/25).
In Portsmouth, the average weekly rent for a studio has increased from £197 in 2021/22 to £221 this academic year (24/25) – an increase of 12%.
Constrained supply and a fall in the delivery of student beds to the market have exacerbated rental growth. CBRE has predicted that by 2028, the market could face a potential shortfall of 620,000 student beds across the UK. This is relative to the 36,000 beds currently identified as being delivered in that period.
According to CBRE research, the sale of buy-to-let homes has contributed to an estimated loss of approximately 10% of the UK’s private rented stock since 2016.
Planning conditions, elevated construction costs, and the rising cost of debt have all influenced the supply pipeline.
CBRE’s data shows there is still interest in the sector from institutional investors, which can be leveraged to increase the supply of beds. Just under £4bn worth of investment deals took place in 2023 alone.
“As maintenance loan growth lags and the cost of attending university grows, we could see a shift in where students choose to go. More than ever, the cost of living is becoming a key decision driver for domestic students when deciding where to apply to study.”
“The loss of House in Multiple Occupation (HMO) homes has constricted supply further, driving up prices for existing accommodation and PBSA beds. Some universities are struggling to house their students in the same city. We need to encourage the development of student accommodation and increase its provision, so it’s affordable and accessible for all students.”
Tim Pankhurst, Head of Student Accommodation Valuation at CBRE
This troubling news comes as BNP Paribas Real Estate’s analysis of preliminary data has revealed that investment into the UK PBSA sector has climbed to £1.7bn in the first half of this year.
