Graduates in Cap and Gown

The need for 25% more university places will result in a continued shortage of UK student accommodation

There is an ongoing shortage of purpose built student accommodation in the UK and if comments made by that country’s universities minister the shortage is only going to grow. Universities in the UK have seen a squeeze on places in recent years, with thousands of students failing to get on courses. In a recent paper, Mr David Willets the minister warned that the number of places at UK universities will have to grow from 368,000 to 460,000 over the next 20 years to meet demand. If these are provided the accommodation shortage will become even more acute.

The comments and projections from Mr Willetts follow on from The Robbins report, which was written fifty years ago and called for and led to a bold expansion in university places. The report’s guiding principle was that higher education should be open to all able and qualified enough to go. The reality is that there are more applications every year than places available and that is not going to change unless the government takes action.

Mr Willets believes that due to the fall in the number of births circumstances have changed since the report was written. Educational standards have also improved with the number of young people with the potential to go to university increasing. He said “However, looking ahead to the 2020s, we can see the increase in the number of births since the turn of the century feeding through into more young people. Those pressures have already been felt in our nurseries and primary schools.”

The above does not take into account the growing number of overseas students that are coming to study in the UK. There are 435,000 at the moment and with the government and universities encouraging overseas students to come to the UK even more places will be required.

Of course, whilst there is no guarantee the government will act in time to prevent the problem from growing, the important first step of acknowledging the need for more spaces has now been taken. One option is for the government is to join forces with the private sector to establish new universities. The recent increase in tuition fees clearly indicates it believes people should pay for higher education and the increased involvement of the private sector seems inevitable.

All this means the demand for student accommodation will keep growing. Unfortunately for students, there is no likelihood that there will be enough purpose built accommodation in the foreseeable future. There are approx. 1.15m students living away from home in the UK and there are only approx. 450,000 purpose built units. This means that 700,000 students are in the private sector looking for accommodation, which is often poorly located and unsuitable.

With increasing numbers of students and restrictive planning and other issues holding back development of suitable blocks, there is going to be continued demand which will result in upward pressure on rent levels and capital values.