Surveying the UK student accommodation market

Before we look at some of the key takeaways from the report, it's worth reminding ourselves of the context within which this year's survey took place.

A record-breaking 39% of all 18 year olds in the UK submitted an application to start studying at UK universities in September 2019, according to data from UCAS, with just over a fifth of applicants from outside of the UK.

Quite rightly, increasing participation rates are viewed as a real strength of the sector, particularly at a time when the total number of 18 year olds in the UK continues to fall. From an accommodation perspective, most markets remain structurally undersupplied and investment, from a diverse range of funders, has continued apace.

However, there are a number of challenges. The most pressing is political. Brexit is still unresolved (at the time of writing), whilst the lack of clarity surrounding fees for EU students following the UK’s departure from the EU poses a challenge for student housing providers, not least because international students are more likely to live in PBSA than domestic students.

The overall cost of going to university is also under the spotlight. Political uncertainty may have meant that the Augar Review has been kicked into the long grass for now, but the specific findings for our sector, should not be dismissed. Within the market itself, this means greater scrutiny of the role that the private sector plays in delivering accommodation.

Indeed, affordability (once again) is the number one issue facing students, according to the results of our survey, whilst value for money is the most important factor influencing decisions on where to live. For investors and operators of PBSA this means delivering the highest quality accommodation possible within the constraints of viability. Operators must be quick to identify and prioritise the elements in accommodation that are most important to students.

In total, more than 60,000 students from across the UK responded to the UCAS/Knight Frank 2020 Student Accommodation Survey. Their responses deliver a unique insight into the preferences and concerns that students have when it comes to their housing requirements. 

Here we look at the main themes and key takeaways from this year's survey:

1. Satisfaction with private purpose-built student accommodation is high

Overall, more than three quarters of students living in purpose-built student accommodation indicated that they were satisfied with their accommodation choice for the year (78%), slightly higher than those living in the private rented sector. Across the UK, around 30% of full-time first-year students live in private purpose-built student accommodation (PBSA), up from 22% five years ago. A further 40% live in halls or accommodation provided by the university and the remainder either live in the private rented sector or at home with parents or guardians. If satisfaction with private PBSA remains elevated relative to the other options available to students, we expect its market share will rise.

2. Affordability is the number one issue for students

It comes as no surprise that value for money and the overall cost of student accommodation are the two most important factors influencing where students live, according to our survey. Affordability remains a key topic within the wider housing market, and the findings of the Augar Review brought the topic into greater focus within the student sector. Development figures suggest that the sector is responding to this with a greater focus on delivering more affordable accommodation. Of the units built in time for the 2019/20 academic year, 52% were cluster flats, which typically command the lowest rents. As the market evolves, investors, developers and operators need to continue to deliver housing that best suits the needs of students.

3. Supporting student wellbeing through design and service is key

In last year’s report we noted that the role of accommodation in supporting student wellbeing was becoming more fully recognised. This year, we wanted to delve deeper and identify what support accommodation providers can put in place. Some 81% of respondents suggested that the creation and running of organised groups or clubs was either “important” or “very important” in supporting wellbeing. From a development perspective, good quality communal or social space to improve interaction was identified as “important” or “very important” by 76% of respondents.

4. International students will remain key occupiers

International students are the most likely to be renting, according to our survey, and separate data from HESA suggests they’re more likely to live in PBSA than domestic students. Of interest to accommodation providers, this group of students is also the most likely to stay in the same accommodation for the duration of their study with 43% saying that the option to stay in the same accommodation for more than one year was “extremely important” or “very important” when deciding where to live.

5. Co-living is the next step

Nearly half of the respondents to our survey indicated that they would move directly into the private rented sector immediately following their graduation. Providing these graduates with high-quality purpose-built rental accommodation in the right areas and at the right cost in the form of co-living or build-to-rent schemes, is a real opportunity for residential investors. According to the 2019 Knight Frank Residential Investment report, investment in the build-to-rent market is expected to grow from £35 billion currently to £75 billion by 2025.