Some 90% of Unite Students accommodation in the UK has been sold for the 2023/24 academic year, the company’s most recent lettings performance has revealed.
The student housing provider acknowledged in its current trading and quarterly property valuations that the supply of UK “purpose-built student accommodation cannot keep pace with growing student demand at the same time as HMO landlords are leaving the sector”.
“We continue to make strong progress with bookings for the 2023/24 academic year with 90% of rooms already sold, demonstrating the strength of student demand and the attractiveness of our fixed-priced all-inclusive offer,” chief executive officer, Richard Smith, said.
“Reservations are significantly ahead of recent sales cycles, reflecting strong demand from both new and existing students as well as new nomination agreements with universities.
“Reservations are significantly ahead of recent sales cycles”
“This progress reinforces our confidence in delivering rental growth of 6-7% for the 2023/24 academic year. Rental growth also continues to support our property valuations as the market adjusts to a higher funding cost environment.”
Shortages of housing in the UK have caused issues in many cities, leading to calls to cap student numbers in Glasgow, while students at Russell Group universities have been paid to defer. The shortages have also resulted in housing scams for international students.
According to Unite’s 2022 Annual Report, universities own around 300,000 beds and new investment “tends to be prioritised towards their academic estate and investment in research capabilities”.
However, it noted that institutions “recognise that high-quality student accommodation is a major differentiator in their ability to attract and retain students”. Additionally, they typically seek to guarantee accommodation for their domestic first year and international students.
Universities have relied on PBSA operators to deliver new accommodation to support growing student numbers, Unite added.
As supply cannot keep pace with growing demand as landlords leave the sector, Smith added that Unite is “tracking a number of new development opportunities at attractive returns”.
It is committed to four development schemes, costing £339 million, but its total development pipeline includes 4,863 beds, costing £850 million. The most recent valuation of the Unite UK Student Accommodation Fund portfolio stands at £2,888 million.
The PBSA provider also noted that as it focuses on single-occupancy bedrooms, it sees “relatively limited risk” if the UK introduces more restrictive visa rules for dependents – something the current home secretary Suella Braverman has suggested.
However, the UK has not made an official announcement on any amendments to its rules for dependents accompanying students completing courses at masters level or above.
