Rogue accommodation agents and housing marketplaces in China are bulk-booking rooms in purpose-built student housing only to cancel them later, causing a headache for UK operators.
As popular cities face accommodation shortages, some students are also selling on reservations for profit while others are booking rooms in multiple locations before they decide where to study.
Representatives working in the UK’s student housing sector said operators experienced high cancellation rates from China ahead of the new academic year.
“It was a massive problem,” said Daniel Smith, director at Student Housing Consultancy, explaining that cancellation rates spiralled in towns like Glasgow, Durham, York and Bristol, where student accommodation typically sells out by April.
“They found themselves, even at the premium end of the market, having to work really hard to sell those rooms in September,” he said.
According to Smith, operators started to see similar patterns of fake email addresses being created to place bookings. Some were paying deposits, but, since the pandemic, not all operators require down payments to secure accommodation.
While some price gouging was happening – where students or agents resell rooms at a profit – evidence on social media suggests the majority reserved the accommodation simply to sell on to students in return for commission.
Agents and marketplaces, which aggregate rental options from various companies, typically receive payments from purpose-built student accommodation providers when a student books a room through them.
“It was clear that some of them had put bookings in early in the market to reserve that availability for later in the market,” said Smith. He added that, in some cases, marketplaces were encouraging students to book as soon as possible and cancel further down the line.
Penny Zhan, marketing lead at VIVA City, which supports accommodation brands to reach Chinese students via WeChat, said agents were making these block bookings to ensure they had exclusivity when it came to selling accommodation to students.
However, some seemingly failed to sell on all the rooms they had reserved, leading them to cancel bookings at the last minute and leaving operators scrambling to fill the rooms.
Although marketplaces and agents risk losing their contracts with PBSA operators for this type of behaviour, the sector is hugely reliant on larger marketplaces to sell rooms and, in turn, some marketplaces are backed by private equity and under pressure to deliver significant returns.
Popular UK cities have grappled with housing shortages in recent years and negative stories about the problems students face finding accommodation have made it to China. Zhan said some marketplaces and agents are fuelling students’ concerns about securing a place to live when they move abroad.
“The anxiety on Chinese social is crazy”
“The anxiety on Chinese social is crazy,” she said, explaining that some agents tell students if they fail to book early, the rent will increase and all the good rooms will be gone.
Smith added that the suspicious activity has continued now bookings have been released for the 2024/25 academic year but that operators are much more vigilant.
Both Zhan and Smith said operators should be asking for deposits and checking the identification of students who are placing bookings.
“There’s no excuse for it to play out the way last year did,” Smith said.
“All these operators should be checking their bookings now, contacting the students, speaking to them, doing their pre-arrival checks and knowing that there’s not just a bot behind each booking.”
