New report brands student maintenance system ‘broken’ amid soaring rents

Annual rent for a student room has risen by almost 15% in the past two years and now takes up most of the average maintenance loan, a new report has warned.

Rents rose by nearly £1,000 to £7,475 for this academic year, compared with 2021/22, according to analysis across 10 key regional university cities by student housing charity Unipol and think tank the Higher Education Policy Institute (Hepi).

Students are being forced to take desperate measures such as illegally doubling up in rooms, taking on increasing amounts of paid work or even avoiding university altogether due to costs, said Unipol’s assistant chief executive, Victoria Tolmie-Loverseed.

Students who cannot rely on family support or do not have part-time work are likely to face financial difficulties, the report said
Students who cannot rely on family support or do not have part-time work are likely to face financial difficulties, the report said (PA)

The organisation estimated that, on the basis of the Government forecast for England, the average maintenance loan expected to be taken up by full-time students is £7,590.

The report warned that students who cannot rely on family support or do not have part-time work, “will have no money to live off, once they have paid their rent”.

Ms Tolmie-Loverseed said student housing “has reached a crisis point in affordability, underpinned by these alarming figures”, with rising rents but “stagnated” real-terms support from Government.

The cities in the analysis were Bournemouth, Bristol, Cardiff, Exeter, Glasgow, Leeds, Liverpool, Nottingham, Portsmouth and Sheffield – with London and Edinburgh deliberately excluded to give a more balanced view of rents outside these expensive markets.

The report said the highest rents and increases are in the cities with an undersupply of accommodation.

Bristol has the UK’s highest average annual rent at £9,200 per year, with Exeter at £8,559 and Glasgow at £7,548, according to the analysis.

Glasgow had the sharpest jump in rental costs at 20.4% over the past two years, followed by 16.1% in Exeter and 15.5% in Nottingham, the report said.

In the survey, 45% of rooms were university-provided, with rents rising by 10% on average across the two-year period.

The other 55% were private sector rooms and those rents rose by almost a fifth (19%), the report stated.

Ms Tolmie-Loverseed said “decades of progress in widening participation in higher education” could be undermined if the student housing “crisis” is not tackled, as she warned of the risks of excluding students from poorer backgrounds and leaving middle-income students feeling forced to take on unsustainable debts.

Martin Blakey, Unipol’s chief executive, described the student maintenance system as “broken”, saying affordability cannot be entirely blamed on housing providers who are “under pressure to cover increasing build and running costs”.

Hepi director Nick Hillman said: “The Accommodation Costs Survey has been tracking the real costs of student housing for decades. Compared to years gone by, we are now at a crisis point. Across most of the UK, the official levels of maintenance support simply do not cover anything like most students’ actual living costs.

Aerial photograph showing Bristol city centre
Bristol has the UK’s highest average annual rent at £9,200 per year, the report found (Alamy/PA)

“In the short term, maintenance support should be increased at least in line with inflation. In the medium term, ministers should rebase maintenance support using the evidence they’ve gathered as part of the Student Income and Expenditure Survey, which is due to be published soon.

“For the longer term, we need measures to encourage the supply of new student housing, which is currently restricted by factors such as higher interest rates and confusion over new regulation.”

Supply issues could be further exacerbated by the Renters Reform Bill, the report warned, stating that unless there are amendments it “will cause major turmoil in the market for student houses in England”, with students treated as any other tenants rather than accommodation being available to rent in line with the academic cycle.

This potential problem was also highlighted earlier this year by MPs on the Levelling Up, Housing and Communities Committee, who said “abolishing fixed-term contracts here could make letting to students considerably less attractive to private landlords”.

Among the report’s recommendations was a call for more joined-up Government policy with departments working together to “highlight the importance of student accommodation, raise its profile and stimulate change”, and for a “resetting” of the student maintenance system.

It stated: “Maintenance support needs to be based on how much it actually costs to be a student living independently and away from home.”

Separately, university admissions service Ucas said the number of 18-year-olds from the most disadvantaged backgrounds in the UK who applied to the most selective universities and courses is the highest on record.

A total of 3,160 18-year-old students had applied for higher education courses with an early October deadline including medicine, dentistry, and veterinary degrees, as well as for all courses at the University of Cambridge and the University of Oxford.

This was up by 7% from the same time last year.

Sander Kristel, Ucas interim chief executive, said: “It’s encouraging to see a record number of young students from the most disadvantaged areas aiming high with their choices for next year.

“The narrowing of the disadvantage gap, against the backdrop of a global pandemic, shows the effort we have made as a sector, to ensure everyone in society can aspire to study the most competitive courses.”

A spokesperson for the Department for Education said: “Our student finance system ensures that the highest levels of support are targeted at students from the lowest-income families. However, if students are worried about their circumstances, we urge them to speak to their university.

“Many universities are doing a brilliant job to support students who are struggling financially through a variety of programmes.

“To support universities to help their students we are making £276 million available this academic year, which institutions can use to top up their own hardship schemes. This is on top of increases to student loans and grants.”