At a recent meeting, Unipol Housing discussed the key trends in student housing, university fees and student demographics, highlighting the challenges facing students, landlords and universities in Leeds and across the UK.

Leeds Student Housing Market: Supply and Demand

The housing market in Leeds has experienced mixed trends. There has been a considerable increase in demand for student accommodation (400-600 additional students) but the supply of off-street housing is constrained due to planning restrictions (article 4).

Private Purpose-Built Student Accommodation (PBSA) has grown, with 1,823 new bed spaces, mostly in studio apartments, and plans for another 3,382 beds. However, rising construction costs may limit some of these projects. Build-to-Rent (BTR) developments are becoming more popular, although student occupancy rates for these developments remain low, ranging from 10-40% depending on the city.

University Fees: A Financial Strain

The increase in university fees to a maximum of £9,535 has raised concerns that it is still not enough to alleviate the financial pressures faced by universities. It is expected to have a greater effect on smaller institutions.

While higher-tier universities, such as those in the Russell Group, may remain largely unaffected, other universities, especially lower tariff universities, are struggling with financial sustainability.

The recent increase of employer National Insurance contribution in the budget will further increase these financial pressures. As the current Labour Government has not announced any help with funding, substantial reforms seem unlikely in the near future.

Student Maintenance Loans: Below Inflation Increase

The increase in student maintenance loans has fallen behind inflation leaving students with a widening financial gap. This is more serious in cities like Leeds, where rents are increasing.

The average rent for off-street housing is £135 per person per week (pppw) including bills, while halls of residence cost £175 pppw. Many students are facing increased financial hardship as a result.

Trends in Student Demographics: Local and International

Across the UK, the number of 18-year-olds accepted into universities has increased, with a considerable rise in students from disadvantaged backgrounds. The number of undergraduate applicants overall accepted has risen by 2.5%. However, the increase is uneven across different types of institutions. The acceptance rates for universities classified by tariff are as follows:

• Higher tariff universities – increase of 20.4% in acceptances from 2015 to 2024, with a 7.4% rise in 2023-2024.
• Medium tariff universities – increase of 8.4% in acceptances from 2016 to 2024, with a 0.8% rise in 2023-2024.
• Lower tariff universities – decline of 4.9% in acceptances from 2016 to 2024, with a 1.4% drop in 2023-2024.

There has also been an increase in mature student applications. However, stricter visa controls have decreased international student numbers, particularly around dependents. The number of applicants is still higher than before the pandemic. Also, there has been a pent-up demand from international students eager to return to study abroad post-pandemic. This has impacted international applications, though the UK remains competitive,.

For the University of Leeds there has been an increase in undergraduate numbers, with 9,200 students enrolled in 2024, up from 7,800 in 2023. This is the university’s best performance in a decade. Leeds Beckett University has seen a decrease, with 4,600 undergraduates in 2024 compared to 5,200 in 2023. However, Leeds Beckett remains competitive within its tariff group.

A trend emerging for Leeds Beckett is the rise of students who live locally, who are choosing to stay at home and commute to university rather than renting from housing providers. Nearly half of Leeds Beckett’s students live in the Yorkshire and Humber region.

Housing Preferences: Shifting Trends Among Students

The housing market in Leeds is expected to experience a small surplus in certain property types due to increased construction of both student-specific accommodation and Build-to-Rent developments. However, demand for smaller student properties and private rentals will likely remain strong. The lettings market is expected to be slower but steadier for the next academic year.

Unipol Housing’s housing-hunting services have seen more individual students seeking accommodation earlier.

However, some students know that more incentives and choices are available for those willing to take their time in looking for properties.

International Students and Visa Restrictions

International students, particularly from India, have continued to show strong interest in studying in the UK in January. The depreciation of the British pound has made the UK more attractive to international students, especially from countries with stronger currencies.

However, visa restrictions, particularly for dependents, have impacted the number of international students applying. The UK’s position remains competitive, with changes to visa policies in Australia, Canada and the USA. This may result in more students choosing the UK. The UK continues to see more international students than pre-pandemic levels.

Summary

The meeting highlighted the ongoing financial and housing challenges for students in Leeds. Rising university fees and the inadequate increase in maintenance loans have made higher education more financially burdensome.

The student housing market is adjusting to changing demands, with a noticeable shift toward smaller properties and more students choosing to live at home. Universities and housing providers will need to adapt to meet students’ evolving needs in the coming academic year, particularly as individual housing hunting becomes more prevalent and the international student market remains competitive.

Unipol Housing is relaunching its housing hunting platform with a major marketing push as of January 13th to address these growing trends and to help students navigate the lettings market.