Rents higher than students are willing to pay in a third of university towns

Students in a third of the 25 largest university towns are in for a shock this semester as the amount of rent they are willing to pay is lower than the average on offer in their town, according to flatsharing website easyroommate.co.uk.

Research carried out by easyroommate.co.uk showed that the maximum amount of rent students are willing to pay each month stands at £411 on average , 15% higher than the average rent of £357pcm currently being charged by student landlords. However, on a regional basis, average rents in eight of the largest 25 student towns are higher than the maximum students are willing to pay.

The average cost of renting a room in a student flatshare across the major British university towns has risen 8.5% over the last year from £329 per month to £357. This is a much higher pace of growth compared to that seen between 2011 and 2012 when rents rose just 5%.

This higher rate of growth has been spurred on by extra demand created by higher student numbers. In 2012 the number of university applicants fell 6.3% compared to the year before to 404,000. But in 2013, university applications have grown 7.2% to 433,330 – their highest level in the last five years. The rise in applications comes despite a rise in the average tuition fee being charged by universities. The average tuition fee across the UK is now £8,500 per year, up from £8,385 in 2012.

Rishi Patel, manager of easyroommate.co.uk, said: “Student rents are once again on the march as student numbers begin to recover following the increase in tuition fees. Rents for student flatshares are now at their highest level in five years which is increasing the financial pressure being felt by many students across the country who also have to deal with higher fees and more expensive day-to-day living costs.”   

In easyroommate.co.uk’s survey of over 1,100 students, 77% said they live in private rental accommodation. Over half of all students (54%) say they have seen their monthly rent rise over the last 12 months. When asked about how much their rent had increased, students felt their monthly rent bill had risen 8.6%, an almost identical figure compared to the actual rise in student rents (8.5%).

The rise in the cost of renting as a student has had varying effects on the living arrangements and lifestyle of students across the country. Over a fifth of students now share with more people compared to last year in order to save costs, while just under 16% now live in a smaller property. Over a quarter (28%) now have less money to spend in their social life as a result of rent rises, while 12% have less money to save for after university and 7% have less to spend on books and other study materials.

In a separate survey of 1,118 student landlords , 27% said they had increased rents over the last 12 months. Only 6% said they had lowered rents compared to last year. When asked what had driven the change in rents 15% felt it was the demand and supply imbalance with a shortage of rental stock and increased demand from students, while a further 15% stated they had felt a rise in the cost of mortgages which needed to be reflected in rental prices. 

Rishi Patel continued: “Last year the only financial respite students enjoyed amid higher tuition fees and mounting day-to-day living costs was a slowing in the growth of rents as new student numbers fell and demand subsided. Now though, applications to university have recovered, demand is up and the pace of rental growth has quickened. As a result many students now have to cut back and count the pennies in other aspects of their daily lives.

“Despite the 8.5% rise in rents over the last year, flatsharing still offers students excellent value for money accommodation and allows students more privacy compared to living in student halls where they might be sharing facilities with larger numbers of their peers. However, students cannot simply continue to pay higher and higher rents. More stock on the market would help ease the supply and demand imbalance and the government needs to do more to incentivise would-be landlords to let out spare rooms, flats and houses in order to help ease price rises in the future.” 

On a regional basis, 68% of the UK’s largest university towns have seen student rents rise over the last twelve months. The biggest rises have been seen in Coventry (18.6%), London (13.3%) and York (10.5%). The largest falls in average rent have been seen in Bath (11.2%), Cardiff (10.5%) and Bristol (9.3%).