Unite reveals the strength of student accommodation sector

Steve Lumley·20 January 2022·6 min read
Unite reveals the strength of student accommodation sector

The student accommodation sector in the UK is currently strong with one provider revealing that they have already sold 60% of their portfolio for the next academic year.

The news from Unite Group highlights that the figure for 2022/23 is up from the 58% recorded at the same time in 2021.

The purpose-built student accommodation provider says there is strong student demand from both international and UK students for the next academic year - though they add that there's a 'slightly later sales cycle' for overseas students.

They say this is down to uncertainty over Covid-19 restrictions.

Students wanting to rebook their accommodation

As result, Unite says it is increasingly focusing on retaining its current customers since this tactic has led to a growth in sales from students wanting to rebook their accommodation.

Unite is also predicting rent growth of between 3% and 3.5% for the next academic year.

In addition, the student accommodation provider is also predicting a return to full occupancy in 2022/23.

Unite also says that its property portfolio is now worth £2.86 billion, that's a rise of 1.6% over the last quarter, and a 4.6% rise over the year.

They also point out that they are making good progress in delivering new student accommodation and there's a 'positive flow' in its development opportunities in prime regional cities, including London.

'Continuing strength of student demand'

Joe Lister, the firm's chief financial officer, said: "Bookings for the academic year in 2022/23 have begun positively and 60% of rooms have already been sold - demonstrating the continuing strength of student demand and success in the growing retention of existing customers."

Unite has also revealed that 70% of students who have 'checked-in' have returned to their accommodation already.

They say that the remaining students will arrive in time for the start of the spring term.

The PBSA provider says that all of their properties are open and operational, and they are employing a range of measures to restrict the transmission of Covid-19 wherever possible.

'Student accommodation sector remains strong'

The managing director of Accommodation for Students, Simon Thompson, said: "The news from Unite illustrates that the student accommodation sector remains strong, and they have a positive outlook for the future.

"The report from Unite also highlights their focus on prime UK cities to deliver quality student accommodation, including in the capital."

Mr Thompson added: "While the student accommodation sector is a strong one and looks to be bouncing back, there's no doubt that student landlords still need to offer quality accommodation to enjoy success."

The news from Unite coincides with a report from HousingAnywhere, an accommodation platform, that highlights that the cost of living in Europe is becoming a growing issue for international students.

All student accommodation types

In a report, they highlight that the rents in Europe have soared over the past year for all student accommodation types.

They highlight that while some students have been willing to pay these higher rents, many overseas students are being forced to defer their plans for studying in Europe because they cannot find somewhere to live that is affordable.

The chief executive of the firm, Djordy Seelmann, says that most European cities are now competing for talent, and that talent is also competing for housing.

He added that universities and property developers need to work together to find short- and long-term solutions for Europe's housing crisis.

'Cancelling their career plans and international education'

Mr Seelman said: "Talents are postponing or cancelling their career plans and international education because they cannot find housing."

The issue of poor-quality student housing for those heading to the UK from overseas has also been highlighted in a report by the BBC.

They report one student complaining about 'grotty properties' with 'maintenance problems' and student letting agents that 'don't listen'.

Landlords unaware of new EPC targets

Meanwhile, around one in seven landlords are not aware of changing energy-efficiency rules that could see their properties becoming unrentable if they don't meet the new standards by 2025.

The findings from Shawbrook Bank reveal that many landlords are in the dark over energy efficiency rule changes - with 15% of those questioned saying they have no knowledge of EPC rule changes.

The EPC rule change will see, from 2025, all rental properties that have been newly let requiring an EPC rating of at least C.

Currently, a rental property needs a minimum EPC rating of E and current tenancies have until 2028 for them to comply with the new rules.

Millions of rental properties at risk of being declared unrentable

The survey highlights that millions of rental properties could be at risk of being declared unrentable because many landlords are unaware of how much work is necessary to upgrade their properties to meet the new EPC rules.

The bank's sales director, Emma Cox, said: "The extent of what the legislation could mean for a landlord has not been realised properly yet.

"Inaction could lead to a considerable percentage of the private rented sector being declared unsellable or unrentable within years if a landlord doesn't take the important steps now."

She added that carrying out improvements before the 2025 deadline will help ensure that a rental property will remain commercially viable for landlords 'in the short-and long-term