PBSA 'can't keep up with demand' as HMO student landlords leave sector
Students looking for a place to live in the next academic year may face a tough challenge, as the UK's largest provider of student accommodation unveils a 7% rent rise - with news that smaller student landlords are leaving the sector.
Unite Group, which operates 157 halls in 23 towns and cities, said it had already filled 98% of its rooms for the upcoming academic year, compared to 91% at the same time last year.
The company attributes the high demand to the rising number of university applicants, especially from overseas.
And the PBSA provider also points to the exit of smaller HMO (houses in multiple occupation) landlords from the market due to higher costs and regulations.
'Purpose-built student accommodation cannot keep pace with student demand'
The chief executive of Unite, Richard Smith, said: "The supply of purpose-built student accommodation cannot keep pace with student demand at the same time as HMO landlords are leaving the sector.
"Unite is uniquely positioned to address this housing need through our best-in-class operating platform, university relationships development and asset management capabilities."
He added: "Reservations for the 2023-24 academic year remain at record levels, reflecting strong demand from both students and universities and the attractiveness of our fixed-priced, all-inclusive offer."
Its properties are worth £4.86 billion
Unite, which was founded in 1991 and houses 70,000 students, said its properties are worth £4.86 billion, that's up 1.2% from April.
The increase in value was driven by rental growth, which offset the impact of higher interest rates on commercial property.
And that rent growth comes from strong student demand as the choice of student accommodation becomes restricted.
The PBSA provider also says that university admissions are up - matching the growing population of 18-year-olds in Britain.
Overseas students make up nearly a third of Unite's tenants, with strong demand from students in India, Nigeria and Pakistan.
'Student demand for accommodation is increasing'
Simon Thompson, the managing director of Accommodation for Students, said: "There's no doubt that student demand for accommodation is increasing but choice is falling.
"The growth of PBSA in the UK in recent years has been impressive but there's still a role to play for smaller student landlords.
"Not all students want to live in, or can afford, PBSA units so it's important that there is a good choice of student properties to choose from."
Mr Thompson added: "The sector is crucial to higher education, and it is time that the government stepped in to help student landlords in increasingly difficult times."
Financial help for landlords from the government
Mr Thompson's call for government financial help for landlords has been echoed by the National Residential Landlords Association (NRLA).
It has responded to a Bank of England Financial Stability Report which forecasts that the average buy to let monthly payment could rise by £275 by the end of 2025.
The NRLA's chief executive, Ben Beadle, said: "Growing mortgage costs are putting responsible landlords in an impossible position.
"Either they leave the market at a time when demand for rented housing is already outstripping supply, increase rents, or soak up growing costs which many simply cannot afford.
"Whilst help has been provided for homeowners in the form of the Government's Mortgage Charter, nothing has been done to support the private rented sector."
He added: "It is vital that ministers step in to protect the market from the impact of growing costs."
Mr Beadle also says that tax hikes on the sector need to be scrapped to boost the supply of homes to rent.
