Accommodation lets by overseas students in London are worth some £600m to the capital’s private rental market, with the wealthiest students spending up to £1,500 a week on accommodation, according to research by lettings agency EJ Harris.
The report which draws on internal data and figures from the Higher Education Statistics Agency, found that the capital’s 107,000 international students spend £1.36bn on accommodation and subsistence a year, including £600m on private lets or halls of residence.
“For every student who can afford to pay £400 a week and to shop in Harrods and Selfridges, there’s also lots of students that are going into house shares”
At the highest end of the market, this adds up to £72,000 a year for rentals in central London areas such as Marylebone, Mayfair, Knightsbridge and South Kensington.
Meanwhile, wealthy students living in the north London borough of Camden can spend up to £1,500 per month on rent.
James Herbertson, director of student accommodation specialist London Nest, confirmed that he has seen an “explosion of student accommodation” catering to international students with a large accommodation budget, but stressed that “if you look at the portion of students that can afford those prices, it’s still relatively tiny”.
He cautioned alongside heavy investment in the top end of the market, there is also a need for continuing investment in more affordable options for other students, both international and domestic.
“It’s incredible quite how fast it’s escalated, but… for every student who can afford to pay £400 a week and to shop in Harrods and Selfridges, there’s also lots of students that are going into house shares where they’re paying £160-£200 a week with all bills included, and that part of the market’s not being expanded,” he said.
Students paying the highest rental rates come mostly from China, Thailand, Russia, Malaysia and Nigeria, according to EJ Harris.
There are also affluent students coming from France, Italy and Spain, it added.
Demand from corporate renters and international students for one- and two-bedroom flat rentals in the city centre is driving up growth, according to research released this summer by LCP, a lettings agency focussed on the central London market.
Rents in prime central London rose this year by 4.2% to an average of £602 a week after a period of stagnation, according to the agency’s annual study.
Knightsbridge saw the biggest increase, up 19.4% to £732 a week.
“London does not have to be an expensive place to study, but it does cater for all budgets within one of the best cities in the world”
Fuelling the increase are tenants “looking for a complete lifestyle experience” but prioritising “location over size”, according to Naomi Heaton, chief executive of LCP.
“There has been a paradigm shift among tenants who increasingly demand immaculately presented flats and service on tap,” she added.
Echoing these comments, Jennifer Parsons, chair of the London Universities International Partnership, a consortium of 18 education institutions in the capital, said that students looking at the top end of the market “want the best facilities in the best areas and are willing to pay for it”.
“London has always seen students, normally those who are sponsored or who come from wealthy families, being prepared to pay top rental prices,” she said.
“These are students who would be used to shopping in Kensington and Chelsea, and would make sense for them in live in an area they are familiar with and with a standard of living to match their home,” she commented.
However, Parsons also stressed that there is “still a much larger proportion of international students in London who live in London cost effectively”.
“London does not have to be an expensive place to study, but it does offer the unique benefit of catering for all budgets within one of the best cities in the world.”
