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Costs Survey2009/10
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Acknowledgements
We would like to extend our grateful thanks to the institutions and private providers who took
part in our online survey, at the very busiest time of the year for accommodation offices. In
particular we would like to thank those who took additional time to carry out a pilot survey and
give us very comprehensive feedback.
These institutions were:
Sheffield Hallam University
Southampton Solent University
University of Leeds
University of Liverpool
Our thanks also go to a number of individuals who took time to comment on the survey
design, drafts of the report, and who provided advice and expertise in a number of areas:
Martin Blakey, Chief Executive, Unipol Student Homes
Malcolm Brown, Loughborough University
Karen Burke, Accommodation Services Manager, Sheffield Hallam University
Claire Callender, Professor of Higher Education, Birkbeck College
Bryan Carroll, Assistant Director Estates and Facilities, Southampton Solent University
Mark Grayling, General Manager, Nottingham Trent Students Union
Debbie Grant, Loughborough University
Dennis Hopper, Director of Residential and Commercial Services, University of Leeds
Ian Humphreys, Liverpool Student Homes
Paddy Jackman, Director of Commercial Services, Imperial College London
Jovan Luzajic, Universities UK
Ed Naylor, Student Accommodation Manager, Liverpool John Moores University
Julie Rugg, Senior Research Fellow, University of York
Ed Sparkes, Vice President (Housing and Community), University of Birmingham Guild of
Students
Roland Shanks, Senior Housing Adviser, University of London Housing Services
Mark Swales, Deputy Director Estates and Facilities, Sheffield Hallam University
Brian Welsh, Head of Operational Strategy, Liberty Living
Ben Whittaker, Vice President (Welfare), NUS
We would like to thank Martin Rushall for his thorough editing of this report.
At NUS, special thanks go to Stephanie Neave for her support throughout the project.
Sarah Wayman Scott Blakeway
NUS Unipol Student Homes
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Contents
Acknowledgements 2
Contents 3
Foreword 5
Executive summary 7
Profile of the sector 7
The cost of accommodation 7
Length of contract 8
Additional costs 8
Regional variation on costs 8
Reasons for rising costs 8The type of accommodation provided 9
Recommendations 10
Strategic development and planning 10Student support 10Transparency 10Sustainability 11
Background 13
The evolution of accommodation provision in higher education 13Accommodation in further education 13Where students live 13
The cost of accommodation 15
Purpose-built accommodation: rising prices 16
Weekly rents 17
Length of contract 17
Headline rent: what is included and what is not 18Additional costs 18
Control of accommodation in institutions 20
Changes to the cost of living 21
Affordable rent 22
Provision and rent: variation across regions and
institutions 23
Regional variation 23
Rents by institution 24Partnership arrangements with third-party suppliers 25
Purpose-built accommodation and the PRS: comparisons by city 27
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The changing profile of accommodation 34
Types of purpose-built accommodation currently provided 34
Specialist housing 36
The balance between institutional and private providers 37
Planned expansion figures 38
Other significant developments shaping the product 38
Are students getting what they want out of the market? 40
What do students want, and what are they getting? 40
Value for money 40
Quality 41
A false market? 41
Are students staying at home more? 42
Are more students choosing off-street properties? 42
Looking to the future 44
Overview 44
Purpose-built accommodation 44
Nomination agreements 45
Low-cost alternatives 45
Short-term accommodation 46
Data tables 47
Table 1: Average weekly rent by category of accommodation 47
Table 2: Average weekly rent by region 48
Table 3: Number of bedspaces by category of accommodation 49
Table 4: Number of bedspaces by region 50
Table 5: Average length of contract by category of accommodation 51
Table 6: Average length of contract by region 52
Table 7: Average deposit 53
Table 8: Rent inclusion by category of room 54Table 9: Rent inclusion base numbers 54
About the survey 55
Methodology 55
Alterations 55
Definitions 57
Comparisons 57
Calculations used 57
Abbreviations used 59
Schedule of respondents 60
Schedule of accreditation scheme operators 61
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Foreword
This is the latest NUS/Unipol Accommodation Costs Survey looking at rents charged in student
accommodation complexes (more generally known as "halls of residence") by both institutions
and the private sector.
Accommodation is a major factor in influencing the student experience. In the CUBO
"Enhancing the Student Experience" Report 2008, accommodation cost was valued as having
the third highest importance in living elements ranging above learning support and
employability.i Both cost and quality are important to students and their education
institutions. The same survey, however, showed a significant gap between importance and
satisfaction in accommodation quality: 78% of students were satisfied on quality but only 52%
of students were satisfied with the value of their accommodation.
Against this background, many accommodation providers gave us information as part of this
survey. Our thanks go to them for their help and co-operation which enables us to put thisdata in the public arena.
These are changing times for student accommodation. Private providers were caught in the
2008 credit crunch storm which was associated with falling property prices. Education
institutions themselves are cutting back on their budgets following cuts announced by the
Government over the next three years. In this context this report balances some positive
developments and raises a number of concerns.
The central concern is that affordability is becoming an increasing issue for poorer (or even
not-so-poor) students seeking to live away from home. Rents are rising quickly, in both real
and percentage terms, and the range of accommodation on offer from institutions is falling.
On the up side, rising rents have been accompanied by a transformation over the last decade
in the quality of accommodation on offer and much of the accommodation covered here has
had a significant effect on driving standards up across the private sector generally.
The question now is how high standards and rents go? There is no reason why richer students
should not have access to self-contained penthouse-type apartments but, clearly, they are not
for everyone. Understandably, as employment prospects become less certain and student
debt increases, students and their parents become more cautious about what to rent and how
much it costs. In the post-Lehman world we are all more cautious about taking on debt to be
paid for by some unspecified highly-paid job later.
It would be a mistake for new investors to be attracted to build more high-cost
accommodation on the basis that rents always rise. The challenge for future development will
be to provide a wider range of new accommodation within a lower-price banding.
In the last survey we were concerned about the development of more complex rental
structures, often to mask real cost. This survey shows that rental structures have simplified,
although they have done so because of the ability to include services within a rising headline
rent. Under this system, transparency has improved and recent benchmarking of standards
within the sector (either undertaken internally or through the Government-approved UUK and
ANUK/Unipol Codes) has kept both physical and management standards high.
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Students are seen as demanding customers and student accommodation is a very specific
niche market within the property world with high levels of servicing. Let us hope that students
are as demanding when they leave student accommodation and can act as drivers in the rest
of the private sector where a high-quality housing option is needed to offset the increasingly
distant prospect for many young people of moving into owner-occupation.
This report highlights the important role that student accommodation plays for both home and
international students who move away from home to study and how accommodation must be
seen as an integral part of the academic and social life of most of our major education
institutions. It is access to the totality of this learning experience that makes the UK higher
educational experience unique.
Our thanks go to Sarah Wayman, Scott Blakeway and Stephanie Neave for writing this report
and managing this project.
Ben Whittaker Martin Blakey
Vice President (Welfare) Chief ExecutiveNUS Unipol Student Homes
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Executive summary
The profile of the sector
Accommodation in this survey falls into three broad categories:
provided by the institutions themselves in their own buildings provided by others but via an arrangement made through an institution, referred to in
this document as a nomination agreement or
provided directly by an external private supplier, described in this report as a privateprovider
Institutionally-owned and managed housing still makes up the vast majority of purpose-built
accommodation. In the survey for 2009-10, 78.0% of purpose-built provision fell into this
category. A further 12.1% fell under various institutionally-linked nomination agreements and
9.9% was provided and directly let by private suppliers.
A wider data set of information is available from the suppliers of the UUK and ANUK/Unipol
Codes of Practice which have wide coverage in the sector. Here, 69% of bedspaces are
directly provided by institutional suppliers with the remaining 31% being provided by private
suppliers.
The cost of accommodation
The latest survey shows that the average cost of a room was 92.90 in 2008-09, rising to
98.99 in 2009-10. The actual increase in cost on the previous survey conducted in 2006-07
is 21.9%. This represents a real increase of 13.0% above inflation.ii
The actual increase for private accommodation was the largest at 29.5%: rent rose from 79iii
in 2006-07 to 102.28 in 2009-10. The average rent in institutional accommodation in 2009-
10 was 98.43, an actual increase of 20.3% from the 2006-07 survey. Across the same
period, the cost of accommodation provided through a nomination agreement grew by a
similar amount (20.4%).
On average rent per week, the most expensive room type was a double studio flat provided by
a private supplier and the cheapest was institutionally provided single self-catered
accommodation.
Average rents ranged in this survey from 49.00 per week up to 220.06 per week.
Rent which includes other services has become more common than it was in the period
covered by the last survey, particularly amongst private providers (see page 17).
From the 2009-10 data, 95.8% of all respondents included energy in their costs, 81.5%
included internet and 68.4% included insurance. Other additions reported were other utilities,
gym membership, free car parking and bus passes.
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Length of contract
The average length of contract has remained essentially the same at 39.6 weeks for
institutional accommodation. Based on the average price of a room, the annual rent a student
could expect to pay would be around 3,892.62 for the 2009-10 academic year.
For the same year, the contract length in nomination agreement accommodation averages at
nearly 43 weeks (42.9). Private providers have the longest average contract length at 44.6
weeks.
On the basis of these figures, the annual rents in accommodation provided through a
nomination agreement and a private provider for 2009-10 are 4,284.35 and 4,560.02
respectively.
Additional costs
There has been a significant drop in the percentage of suppliers charging a deposit from 79%
in 2006-07 (undifferentiated) to 57% of institutions and 62% of private providers.
Private providers deposits are covered by the Deposit Protection legislation and abide by the
timescales required of the regulations for returning deposits (about 4 weeks). Educational
institutions who are outside of the scheme returned their deposits at an average time of 4.8
weeks, although some institutions took as long as 16 weeks.
Regional variation on costs
Predictably, London remains the area with the most expensive rents averaging 125.34 a
week across all accommodation in 2009-10. The region with the cheapest rents is Northern
Irelandiv with an average rent of 64.17.
Reasons for rising costs
There are several reasons for rents continuing to rise well in excess of inflation:
the refurbishment of older stock newer student accommodation being associated with ever higher standards of amenity
and service
newer buildings tending to be expensive both to manage and to maintain the increase in the provision of ensuite rooms and studio flats the phasing-out of shared cluster flats with shared bathrooms in favour of ensuite
provision
Additionally, how institutions and other providers set their rents can be highly complex and
may be influenced by other factors, including demand, staffing, subsidising of certain rooms
and differential rents for factors such as room size.
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The type of accommodation provided
Self-catered accommodationv with ensuite facilities has now overtaken single self-catered
provision as the most common room type, accounting for 47.8% of bedspaces in the 2009-10
survey. Broken down, it represents 40.4% of institutional accommodation, 75.5% of rooms
offered through nomination arrangements and 71.2% of privately provided accommodation.
Single self-catered continues to be a common room type, and, with substantially cheaper
rents, remains an integral fixture of student accommodation provision.
Catered accommodation has continued to decline steadily but slowly over time. However it
may have reached a plateau. It accounts for around 17.7% of institutional accommodation
caught by the latest survey, broadly in line with the figure for the previous survey (17.3%).
Studio flats have continued to grow in number, but at a much slower rate than ensuite
accommodation. It accounts for 2% of accommodation overall. The majority of this growth is
in privately supplied accommodation. Indications from the sector are that this type of
accommodation will continue to be developed, though the number of students who will be able
to afford it is in question.
Provision of accommodation suitable for disabled students was high, at 95.7% of institutions
and 86.2% of private suppliers, with newer builds capable of ready conversion when needed.
The availability of accommodation for students with families is much lower less than a third
(32.3%) of institutions and less than a fifth (17.2%) of private suppliers had any such
provision. However, this provision is concentrated in a small number of institutions, which
may indicate that the need is being met by education providers with a particular studentprofile.
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Recommendations
Strategic development and planning
1. Affordability and choice should be reflected in the development and management ofstudent accommodation provided by institutions or for them through agreements, and arange of rents should be maintained.
2. The dangers of constantly upgrading accommodation to the point where all rents fallwithin high rental bands should be acknowledged. There should be a good range of
accommodation type and cost available to students, allowing for provision of specialist as
well as low-cost housing. As a rule of thumb, 25% of all rents charged by (or through)
the institution should fall within the bottom quartile of the institution's rent structure.
3. Institutions and private providers should work with students and students unions toassess the housing needs of their students periodically, and regular satisfaction surveys
should be undertaken (ideally annually) and the information they generate fed into a
strategic assessment.
4. Institutions and private providers should ensure that student representatives areinvolved in, or consulted on, future developments in accommodation available, including
rent-setting, nomination agreements and refurbishments.
5. Institutions should be aware of their wider obligations to maintain and protect housingstandards outside their immediate provision by actively supporting accreditation and
promoting its benefits to their students and staff.
Student support
6. Institutions should consider current levels of student support within their costings forrents in order to ensure that students who are more dependent on loans and grants are
not priced out of accommodation.
7. Institutions should consider accommodation type, cost and location when carrying outimpact assessments under equality legislation.
8. The relationship between housing costs, poverty and educational choice is a complex oneand further work should be undertaken to explore what support should be available and
how this should be administered.
Transparency
9. The costs of student accommodation should be simple and made easy to understand.Contractual and cost obligations should be clearly spelt out to students in advance of
them making decisions about what to rent. It is particularly important that good quality
and transparent information is available when online booking and renting systems are
used.
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10. Booking fees taken in advance of forming a tenancy should relate specifically to theadditional cost of administration incurred by entering and then withdrawing from the
allocation system. Booking fees should not be seen as any form of cancellation charge or
payment where no specific room has been reserved.
11. Both the UUK and ANUK/Unipol Codes of Practice now have a four-week period withinwhich a student must receive their deposit back or be given clear reasons for the deposit
being withheld. This timeframe mirrors that set down in legislation for students renting
outside an institution on an assured shorthold tenancy. No institution should exceed this
limit for any reason and students are entitled to get their money back quickly.
12. Those administering the Codes of Practice should closely and specifically monitor theperformance of those who have agreed to adhere to these standards and should identify
in their annual reports any member who falls short of professional standards in this
regard.
Sustainability
13. Sustainability issues are of growing importance. Despite Energy Performance Certificatesnot being legally required for students renting individual rooms in a complex, all students
should have access to this information in the form of, at least, an EPC being displayed
prominently in each entry lobby to the building and details being available on the web for
students to see prior to renting.
14. Whilst charging energy inclusively within the rent reflects student preferences for aninclusive cost, every effort should be made by accommodation providers to give students
information on how much energy their flat is using plus further information to enablethem to compare their energy usage with an average use. Incentives should be
developed to encourage energy saving
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Background
The evolution of accommodation provision in higher education
Student accommodation in the UK has evolved over centuries, from as early as the twelfth
century in Oxford and Cambridge colleges through to the present day. It now houses nearly
half a million students.
Changes since the introduction of non-institutionally owned or managed accommodation in the
early 1990s are of particular note; between 1988 and 1998 student numbers increased by an
average of 138% a year.vi This mass expansion in student numbers, as well as other factors,
accelerated the erosion of the traditional halls of residence and the paternalistic lines on which
they were drawn. Consequently, accommodation began to develop to house higher numbers
of students at lower cost. Nonetheless, institutions were poorly positioned to match bedspace
provision and student numbers continued to grow. This expansion was compounded by the
internationalisation of higher education between 1998 and 2008 international studentnumbers increased by around 60%.vii
The result was a growing default reliance on local housing stock to meet the extra demand. A
solution for bridging the gap in bedspaces emerged as private suppliers major commercial
property development and management companies together with smaller numbers of
charitable housing organisations, entered the market in the 1990s. By the early part of that
decade, HE funding councils were actively encouraging universities to explore PFI
arrangements to supplement and upgrade their accommodation provision, or to make it
financially sustainable.viii
Commercial investment in student accommodation brought with it the provision of new
services and choices, including ensuite bedrooms, internet access, and gym facilities.
Although popular, the enhanced product and add-on services entailed a major hike in costs,
the affordability of which is in serious doubt for many students.
Accommodation in further education
Accommodation for higher education institutions makes up the vast majority of the sector.
However, there are also around 50 further education colleges around the country which
provide accommodation. The rest do not and the vast majority of FE students live at home.Around 1,900 bedspaces are covered by the ANUK/Unipol Code for Large Developments.
FECs providing accommodation tend to be small, specialist colleges, and the level of provision
is consequently on a smaller scale than in many higher education institutions (HEIs).
However, as distinctions between higher and further education continue to blur, this may be an
area of growth for student accommodation.
Where students live
Student accommodation continues to house a large proportion of students, 22% of full-timestudents according to the latest data. This represents a slight decrease on previous years.
The largest proportion of students (35%) currently live in the PRS with friends. Financially,
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living with parents or relatives is an increasingly attractive option. The figure currently stands
at 23%. Smaller numbers:
rent on their own or with a partner (10%) own a property (10%) or live in a house owned by their parents (1%)ix
Most institutional bedspaces are filled by first-year full-time undergraduates, but this type of
accommodation is also an important service for postgraduate and international students.
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The cost of accommodation
Purpose-built accommodation: rising prices
The provision surveyed falls into three broad categories accommodation:
provided by the institutions themselves in their own buildings provided by others but via an arrangement made through an institution, referred to in
this document as a nomination agreement
provided directly by an external private supplierRent in purpose-built accommodation continues to rise. Between the previous NUS/Unipol
Accommodation Costs Survey in 2006-07 and 2009-10 data, there has been a 21.9% actual
increase in average rents. Taking inflation into account, this is a real increase of 13.0% over
the last three academic years.
The average rent increased from 81.18 per week in 2006-07 to 92.90 in 2008-09 and to
98.99 in 2009-10.
Whilst we are still seeing rents increasing, however the rate of this growth appears to be
slowing. Rents between 2008-09 and 2009-10 increased by 2% above inflation (6.6% actual
increase), compared to 5% for the previous year.
Broken down by type of supplier, increase in rents was highest in accommodation provided by
external private suppliers with a 29.5% actual increase from 79 per week in 2006-07 to
102.28 in 2009-10. The average rent in institutional accommodation in 2009-10 was 98.43,an actual increase of 20.3% from the 2006-07 survey. Across the same period, the cost of
accommodation provided through a nomination agreement grew by a similar amount (20.4%),
averaging 99.93.
There are several reasons for rents continuing to rise well in excess of inflation:
the refurbishment of older stock newer student accommodation being associated with ever higher standards of amenity
and service
newer buildings tending to be expensive both to manage and to maintain
the increase in the provision of more expensive ensuite rooms and studio flats and thephasing-out of shared cluster flats with shared bathrooms
many suppliers charging rents inclusive of internet and energy costs, which themselvesare subject to fluctuation.
Added to this, how institutions and other providers set their rents can be highly complex and
may be influenced by other factors. These include demand, staffing, subsidising of certain
rooms and differential rent levels for factors such as room and bed size.
On the face of it the increases in rent for purpose-built accommodation are relatively modest,
but in the context of the economic downturn they are significant. The early indications on rent
levels for 2010-11 are that increases in real terms will continue to be a feature of the market
at a time when student funding is static and support from parents, themselves under economic
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pressure, is falling away. Private investment and development are also anticipated to continue
in this sector.
Comparison with the PRS serves to emphasise the resilience of the purpose-built market.
Since the onset of the recession in 2008, prices have substantially dropped in the PRS. As of
December 2009, rents for flats and houses in the private sector were 3% lower than in
December 2008, as recessionary forces created a renters market.x These forces included:
oversupply in the market landlords looking to remain competitive increasingly cost-conscious tenants prepared to shop around current policy drivers to move students away from living in the private rented sector.xi
By contrast, purpose-built accommodation providers appear to be relatively inured against
these market shifts, and demand for purpose-built accommodation public and private
remains strong as student numbers stay buoyant. This is particularly worthy of remark in the
context of the current policy drivers to shift student living out of converted off-streetproperties through tighter planning restrictions in key student areas.xii .
This is not to say, however, that private suppliers, and to some extent the institutions
themselves, are immune to the general economic downturn in the property market.
Revaluation of assets has placed a much greater emphasis on the revenue performance of
student accommodation rather than on equity appreciation. There is certainly pressure from
lenders on private sector providers to improve revenue. Within the educational sector there is
encouragement within institutions themselves to ensure that student accommodation budgets
not only break even but return a surplus to the core institutional budget. This is certain to
increase as institutions' funding from central government is reduced and this is likely to fuelrent increases over the next two years.
The continuous rises in student rents do beg the questions "Can rents go on rising in the
foreseeable future and Will students and their parents continue to be able to meet these
costs?" Elsewhere in this report it is suggested that these real year-on-year increases are
beginning to meet some market resistance from consumers and students, particularly in
higher-cost areas such as London. Here, students are shopping around to find the cheapest
deal. This trend is resulting in increased voids in the higher-priced provision.
Weekly rents
As Figure 1 below illustrates, the average weekly rent for a self-catered single room provided
by an institution increased by 14.3% since the last survey (for full definitions of each room
category, see page 55). The parallel increase for the product as offered by a private provider
is 20.5%. For ensuite rooms the most common category in this survey institutional rent
rose by 18.2% over the same period, as compared to a 30.6% increase set by private
providers.
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Figure 1: Average weekly rent by room type, and change since 2006-07
Average weekly rent by room type
Institutional 2006-07 ()2008-09
(0.00)
2009-10
(0.00)
Actual
increase /decrease
2006-07 to
2009-10
Real
increase /
decrease(linked to
RPI)
2006-07 to
2009-10
Self catering
single69 74.68 78.84 +14.3 +5.9
Self catering
ensuite86 95.88 101.64 +18.2 +9.5
Studio flat
single
Studio flatdouble
110118.50
127.63
121.80130.47
136.93
132.31 +20.3 +11.4
Full-board
single105 109.89 114.29 +8.9 +0.9
Full-board
ensuite128 135.49 146.73 +14.6 +6.2
Part-board
single90 101.78 105.94 +17.7 +9.1
Part-board
ensuite120 113.54 118.38 -1.3 -8.6
Houses76 110.03 108.91
+43.3%+32.77%
Flats82 119.81 126.12 +53.8% +42.50%
Nomination
Self-catering
single77 76.40 84.02 +9.1 +1.1
Self-catering
ensuite86 95.64 103.37 +20.2 +11.4
Studio flat
single- 130.67 147.74 - -
Studio flat
double- 137.17 179.25 - -
Private
supplier
Self-catering
single71 76.07 85.57 +20.5 +11.7
Self-catering
ensuite80 100.29 104.50 +30.6 +21.0
Studio flat
single
Studio flat
double
114121.83
142.26127.61
128.45
143.92133.19 =16.8 +8.3
Studio flats are another category of room that has seen considerable increases in rents during
the past three years. Over that period, rents increased by 20.3% for institutions and by
16.8% for private providers.
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Catered hall rents have grown overall, though at a slower rate than other in categories, whilst
part-board ensuite has actually decreased in cost.
Length of contract
When looking at rent levels, it is important to assess not just weekly rent, but length of
contract and additional costs levied by the accommodation provider. Only then can the total
cost of a room be accurately assessed and even then, drawing direct comparisons about this
information is difficult.
Variation occurs by category of accommodation: while a full-board ensuite room is rented for
an average of 36 weeks, a student could expect to rent a flat for 46 weeks (see Table 5)
Overall, however, the average length of contract for institutional accommodation has
essentially remained the same as in 2006-07 (39.3), at 39.6 weeks. Taking the average price
of a room, the annual rent a student could expect to pay would be around 3,892.62 for the
2009-10 academic year.
The contract length in nomination agreement accommodation averaged at nearly 43 weeks
(42.9), whilst private providers have the longest average contract length at just over 44 weeks
(44.6). On this basis, the annual rents in accommodation provided through a nomination
agreement and a private provider are 4,284.35 and 4,560.02 respectively.
Headline rent: what is included and what is not
Rent inclusions
Most institutions set rents to include services and utilities. This trend has gathered momentum
across the sector since the 2006-07 survey. Inclusion of internet access within the rent at
institutions has increased from 74% to 82.6% in the 2009-10 data. Energy inclusion has
increased from 91% to 96.8%. Inclusion of insurance within the rent has increased the most
from 56% in 2006-07 to 67.4% in 2009-10.
Figure 2: Percentage of respondents including utilities and other services in rent
Percentage of respondents including utilities and other services in their
rent
Institution Nomination PrivateInternet 74% - 17%
Energy 91% - 55%2006-07
Insurance 56% - 83%
Internet 80.2% 63.57% 68.8%
Energy 96.8% 95.68% 91.1%2008-09
Insurance 59.4% 64.14% 84.9%
Internet 82.6% 76.43% 79.0%
Energy 96.8% 96.50% 87.5%2009-10
Insurance 67.4% 65.37% 80.5%
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The 2006-07 survey found that the majority of private providers charged separately for utilities
and services. The current survey indicates a dramatic change in this picture. The earlier
finding was that under one in five (17%) providers included internet access in 2006-07. Three
years on, nearly four in five (79.0%) make this inclusion. Over the same period, the number
of respondents including energy costs in rent has increased from 55% to 87.5%. The inclusion
of contents insurance has fallen slightly from 83% in 2006-07 to 80.5% in 2009-10.
Where institutions did not include internet, energy or insurance in rental fees, they charged on
average 92.92, 275.00, and 14.33 a year respectively. The equivalent charges from
private suppliers were higher at 141.89 for internet and 295.00 for energy.
Additional costs
This survey examined other charges that were levied by providers in the following three
categories:
Deposit a fee paid by a student to secure against damage to the property or rentarrears at the end of the tenancy (at which time deduction may be made and the
balance returned)
Administration fee a fee paid by a student to cover the administration costs ofbooking a room. It is sometimes referred to as a booking fee and is often non-
refundable
Rent payment in advance paid by a student to secure a room at the time ofbooking and deducted from future rent payments
Deposits
Deposit protection does not apply to institutions which do not rent on assured shorthold
tenancies. Elsewhere, deposit protection has resulted in a reduction in the number of
landlords charging a deposit.
Fifty-seven per cent (40) of institutions and 62% (29) of private providers charged a deposit
which is held in case of damage or rent arrears. This is a considerable reduction on 2006-07
when 79% (of both institutions and private providers) charged a deposit.
Where a deposit is charged, however, the amount has increased from 180 in 2006-07 to
207.73 in 2009-10 for education institutions and from 198 in 2006-07 to 237.93 in 2009-
10 for private providers. The overall average deposit charged in 2009-10 was 220.42.
Most private providers who charge deposits fall within the deposit protection legislation,
implemented in April 2007. The law now requires compliance with specified timescales for the
return of deposits (around four weeks taking into account administrative time). The deposit
protection schemes do not apply to education institutions. The average time it takes them to
return a deposit stands at 4.8 weeks. However, some institutions took 16 weeks. It should be
remembered that many students need the return of their deposit quickly to pass on to their
next landlord as a new deposit.
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Most education institutions are members of two Government-approved Codes of Practice.xiii
Currently, the ANUK/Unipol Code, which covers around 20% of the education sector, imposes
a four-week deadline for returning deposits. The available evidence suggests this is being
met. The UUK Code stipulates no deadline, although it has recently been agreed, subject to
Government approval on a revised Code, to add a four-week deadline for returning deposits.
Any future survey should reflect a reduction from these long return times to the four-week
limit. UUK Code administrators are anticipated to intervene and force change where return
times are poor.
Administration fees
As their use continues to rise, it is important that administration fees are levied fairly. In
many cases a "booking fee" does not actually book anything. Whilst it secures a student's
place in some subsequent room allocation process, it does not involve the institution
contracting to provide the student with a specific room. So, if no actual room is booked and
the charge is made simply to cover the administrative cost of entering a student into a system,
the question arises: how much does this task really cost?
Over a quarter of all respondents used booking fees (28.0%; 19 institutional respondents, and
18 private providers). The average booking fee is 150.79 in institutional accommodation and
135.28 in private supplier accommodation but fees range from 25 to 300.. It would be
difficult to defend a charge of 300 without a contract having been formed. The levy of such a
high amount for simply entering details onto a computer system (often undertaken online by
the student themselves in any case) would seem an excessive administrative cost, if a student
subsequently wanted to withdraw from that system. In comparable areas where the Office of
Fair Trading has been asked to make an assessment of what is fair, it has generally set the fee
at around 35.00.
Advance rent
Additionally, 15% of institution respondents required their students to pay an average of
304.92 rent in advance. Although advance rent is subsequently deducted from routine rental
payments, it can represent a substantial up-front payment, often in the academic year before
the student moves in, or before they have received their student support package for the year.
A minority of private providers (three) reported that they asked for rent in advance, although
where this was the case, it averaged 416.67.
Control of accommodation in institutions
The organisation of the student accommodation function varies from institution to institution,
but in recent years there has been a trend to align it with the broader student services
function. This pattern follows the increasing emphasis in the sector on the student experience
and the recognition that students accommodation is a significant part of that experience.
Nearly half (48%) of respondents now organise and treat student accommodation as part of
student services.
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Some education institutions see student accommodation as being essentially about buildings
and their maintenance. Amongst respondents 41% of operational managers in student
accommodation report to the institutions Director of Estates or equivalent.
A small proportion of institutions (11%) reported that student accommodation sat within the
managerial compass of the Director of Finance. It is of interest to note that where the line of
responsibility is to the Director of Finance, rent was on average 8.98 per week more
expensive than accommodation under Estates Directorates, and 6.22 per week more
expensive than the average cost of accommodation under Student Services. This perhaps
reflects a stronger managerial interest in financial return.
Good practice dictates effective management through close collaboration between functions, in
particular estates, student services and finance. However, the organisational location of
student accommodation can provide a pointer to how an institution perceives its role as an
accommodation provider.
Changes to the cost of living
According to the Student Income and Expenditure Survey, in 2007-08 a full-time students
average income was 10,425. This was made up of:
main sources of student supportxiv 4,771 other sources of student support 1,025 paid work 2,108 support from family and friends 2,045 benefits 258 other sources of incomexv 219
However, 20% of this total average income (2,237) was paid directly to the institution as
tuition fee loans, leaving 8,188. Factoring in inflation,xvi this figure converts to 8,473 for
2009-10.
On the basis of the average contract length (40.5) and the overall average weekly rent
(98.99), the total expenditure on rent would be 4,003.91 (excluding additional fees and
deposit charges). This accounts for nearly half (48.9%) of a students overall average income,
and nearly all of that received through loans and grants. It would also exhaust the maximum
bursary for a residential FE student from the lowest income bracket (3,458 and 4,079 in
London). Commentary within the sector also recognises that these rents implicitly rely onparental support.xvii
The SIES 2007-08 found that students who started their course after the changes to student
support finance in 2006-07xviii faced a larger net debt than those who started before this date.
Unsurprisingly then, over half of all full-time students (53%) in 2007-08 reported doing paid
work during term-time, with a third of these stating that this had adversely affected their
studies. A further 56% of full-time students felt that financial concerns had weakened their
academic performance to some extent.xix
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Affordable rent
In the context of the evidence of students income continuing to be degraded by rises in rent
for purpose-built accommodation and by cost-of-living increases, it is essential that institutions
take affordability seriously.
Affordable is a word frequently used in relation to accommodation for students. But its
meaning is elusive because affordability varies according to the individual students financial
circumstances. It is, however, clear that as developers have upgraded the quality and
specification of accommodation, students have spent a higher proportion of their available
resources on where they live.
There is evidence, particularly in London, to suggest that top-end rents for high specification
amenity levels may now be exceeding the ability or preparedness of even the wealthier
students to pay them.xx
It is also important to differentiate between the rooms that are "most popular" at the
application stage and those that register the best satisfaction ratings amongst students who
are resident. The two things often turn out to be different. Research from Nottinghamxxi
shows that for the sample surveyed levels of dissatisfaction were higher in higher-priced
properties. This may reflect higher (unmet) expectations of service.
Institutions that get this right recognise that satisfaction levels are not straightforwardly a
function of the level of amenity. Detailed account must be taken of affordability and value for
money if students are to register satisfaction and positive feedback on the quality of their
experience. As discussed later in this report, there is substantial evidence to suggest that
larger, more communal flats in a middle price band are, once students actually start living inthem, a highly popular and successful accommodation option.xxii
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Provision and rent: variation across regions and
institutions
Regional variation
On average cost per bedspace London was still the most expensive area to live with an
average rent across institutionally and privately provided accommodation of 125.34 a week in
2009-10 (see table 2a). This represents a rise of 21.2 % on the 2006-07 figure (103.40). The
survey data shows that the cheapest place to live during the period was Northern Ireland at
64.17 a week (a decrease of 9.6%), followed by Wales at 79.40 per week (an increase of
18.5%).
The overall mean rent for London was 150.99 per week. The lowest overall mean rent was in
Northern Ireland at 67.62 per week (see table 2).
As rents increase, it is important that rent structures are devised to offer a range of productsand costs which reflect the diverse budgets, requirements and preferences of students.
Building in low-cost accommodation options is essential to avoid pricing the least well-off
students out of the market or forcing them to study from home.
As expected, there are significant regional variations in both the cost and ranges of
institutionally provided accommodation available:
Figure 3: Rental range in university-owned accommodation by region (2008-09)*
*East Midlands removed due to incomplete data
The average cost per bedspace across all accommodation surveyed stands at 98.99 per week
(see page 15). The table on the following page sets out, by region, the percentage of
bedspaces offered by institutions that remain under 90 per week.
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Figure 4: Percentage of rents in each region under 90 per week
Percentage of rents under
90/week
Region % under 90
per week
East of England 44.9
London 11.7
N. Ireland 99.7
North East 58.1
North West 64.8
Scotland 48.1
South East 34.3
South West 37.0
Wales 88.3
West Midlands 89.1
Rents by institution
Comparing rents at different institutions is complex, with different locations and institutional
characteristics leading to widely varied rental structures. A look at a sample of 13 different
universities across the UK shows the wide range of rents offered at these institutions.xxiii
Figure 5: Rental range in university-owned accommodation at selected institutions
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Institutions rents fall into between two and all eight bands. For the purposes of this analysis,
those which feature fewer than five bands have been classified as having a narrow range, and
those with five or more bands have been classified as having a wide range. Seven institutions
out of the 13 had a narrow range with five of these having only three rent bandings.
As was the case in the 2006-07 survey, Aston and Salford offer the highest proportion of low-
end rents, but also have the lowest rental range (two bands). This may be due to a
commitment to affordability, older stock, and/or the availability of privately provided
accommodation to offer more expensive, high-specification accommodation for students who
want it and can afford it.
Sheffield Hallam also has a narrow range of bands (three), with no accommodation costing
over 100 per week, and none below 70 per week (though the university provides the vast
majority of its accommodation through the private sector, as illustrated below). Similarly, the
University of Liverpool appears to have fewer rent bands and no very low rents, although
almost all of its rooms are under 100.
Leeds, St Andrews, Kent and Exeter have put together institutional provision and rental
structures which offer significant numbers of bedspaces within seven or all eight rent bands.
This gives students genuine choice, which has both breadth and depth.
Partnership arrangements with third-party suppliers
Figure 6: Rental range in nominated accommodation at different institutions
Four of the institutions also have nomination agreements with private providers. These form
an integral part of their portfolio.
The University of Leeds is one of these institutions. While nomination agreements at Leeds do
not produce as wide a range on cost, they do add to bedspace numbers and to the overall
range of accommodation. Exeter appears to offer nominated rooms as a more expensive
product option. These may be newer stock than their own accommodation or to a higher
specification. At the University of Kent most rooms in its nomination schemes fit into themiddle of its own rental structure.
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Sheffield Hallam offers a good example of how working with the private sector can produce
purpose-built solutions outside the institutional framework. Most of Hallams accommodation
is provided through nomination agreements. In partnership with the private sector, the
university is able to offer accommodation with a range of rent choices, including low-cost
options.
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Purpose-built accommodation and the PRS: comparisons by city
The data used in this section was collected in addition to the main survey and is intended to
provide an illustration of the pricing structure within different student accommodation rental
markets.
Because of the nature of the off-street market, accurate data is difficult to come byxxiv,
particularly in terms of rent levels. A number of cities have been analysed where there is a
central point in the student accommodation market (marked * in figure 7) and data has also
been used for cities where a significant amount of work has been done in the local area.
Average rents for an off-street property are listed below for a selection of university cities:
Figure 7
Average rent per week for an off-
street property
City Rent (to nearest
)
*Nottingham 63
*Leeds 63
Birmingham 62
*London 107
Sheffield 61
*Liverpool 55
*Bradford 45
In looking at the rental structures in these cities, adjustments have been made so that rents
are fully comparable over a 44-week contract. Allowance has been made for inclusivity of
insurance (3 per week), utilities (6) and internet (2.88). Some rents will include additional
items such as travel cards, Junior Common Room fees, NUS Extra cards and access to fitness
facilities, but these are not treated here as core to the accommodation product and are
therefore excluded. Shaded columns on the graphs represent different average weekly rents
for developments. The comparative rent for an off-street property is indicated in dark on the
graph.
The horizontal axis represents each development / property; the vertical axis represents the
average rent per week.
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Nottingham
Figure 8
In Nottingham there is only one rent option that is cheaper than off-street accommodation.
There are a number of private providers active in the Nottingham market. Many of the lower-
cost rooms have shared bathroom facilities, although some of these rooms have in fact been
developed within complexes which also offer higher-grade provision set at a higher rent level.
Much of the accommodation between 80 and 100 is ensuite and there are 20 different cost
options within this band. Once rents move over the 100 mark, there is a prevalence of studio
flats. Although these are likely to represent only a few bedspaces, they are at very high-end
rents compared to the rest of the provision.
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Leeds
Figure 9
In Leeds the cheapest rent option, when allowance is made for inclusivity, is a room in an off-
street property. The average cost is 63 per week. There are a number of private providers
active in the Leeds market. Some have worked out partnership arrangements with local
institutions. The University of Leeds also has a large stock of its own accommodation. Much
of the accommodation at the lower end of the rent structure comprises a combination of
University stock and rooms with shared bathroom facilities.
The middle area of the graph, between 80 and 110 represents a wider range of private
providers and is mainly made up of ensuite provision. At the top end of the market, a large
number of providers offer small levels of studio accommodation and even penthouses. These
range from 120 to around 180 per week.
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Birmingham
Figure 10
In Birmingham the distribution of maximum and minimum rents is set wide. The cheapest
rooms are pitched around 50 with the most expensive at just under 200.
It is clear from the graph that there is a wide range of rent options suitable for a range of
pockets. There are a number of very low rent options, with five coming in at less than a room
in an off-street property. There is a noticeable step up in the graph where there are a large
number of rooms priced at between 75 and 100 which are mainly, but not exclusively,
ensuite.
Studios reflect the trends seen in Leeds and Nottingham, as they come out as the most
expensive option. The steep rise to the right of the graph represents the premium rent which
studio accommodation attracts, comfortably exceeding 150 per week in some cases.
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London
Figure 11
The student accommodation profile for London is unique in the UK sector. There are more
not-for-profit providers which make up many of the rental options within the lower end of the
market. These organisations, such as Goodenough College and International Student House,
consider applications against a range of criteria in order to create and maintain a culturally
diverse but balanced residential community. They also aim to set and keep rents at an
affordable level.
The average rent for a room in a shared property in London is around 100 per week which,
though more expensive than elsewhere in the country, is still the third lowest rent option once
adjustment is made for inclusivity. Of course, it is a vast city and rents are likely to vary
according to proximity to certain institutions or by zone or borough.
There is a noticeable rise at 135 where the majority of accommodation becomes en suite and
this extends upwards to the most expensive en suite accommodation at 290 per week. The
most expensive options are studio flats that extend upwards to 350 a week
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Sheffield
Figure 12
In Sheffield a large proportion of the market is under 100 a week notwithstanding the
emergence of more expensive new-build accommodation as a significant feature in recent
years. A room in an off-street property is still a competitive rent option only four
accommodation types are cheaper.
At around the mid-point of the graph, rents are almost exclusively for ensuite rooms.
Although rent levels are somewhat lower, the trends are similar to those seen in other cities
with a tendency to move from standard wash facilities to ensuite as rents increase. A number
of studio rooms are present in the market and again these make up the more expensive rental
options.
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Liverpool
Figure 13
Liverpools cheapest rental options are in purpose-built developments, with off-street property
being the fifth cheapest option. The graph shows a steady rise in rents, with most falling
between 50 and 100. The provision on offer gradually moves from standard wash facilities
through to ensuite, which becomes increasingly prominent as rents move above 70.
The top end of the rental structure is also characterised by a steady arc. Studio flats are again
preponderant in this market segment, although there appear to be fewer studio rent options in
Liverpool than in other cities compared here.
Conclusions from comparisons
As rents increase, it is important that rent structures are devised to offer a range of products
and costs which reflect the diverse budgets, requirements and preferences of students.
Building in low-cost accommodation options is essential to avoid pricing the least well-off
students out of the market or forcing them to study from home.
As expected, there are significant regional variations in both the cost and ranges of
institutionally provided accommodation available.
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Figure 16: Percentage of bedspaces by category of accommodation
Bedspaces by category of accommodation
Category% bedspaces
2006-07*
%bedspaces2008-09
% bedspaces 2009-10
Institution
Self-catering single38.53 36.9 35.5
Self-catering ensuite 31.30 40.6 40.4
Studiosingle
Studiodouble
Studioflat
1.120.60.3
0.90.70.3
1.0
Full-board single10.30 9.2 9.4
Full-board ensuite2.56 4.0 4.7
Part-board single2.95 3.4 2.8
Part-board ensuite1.12 0.8 0.8
Houses 0.93 1.5 1.8
Flats 3.16 2.6 3.6
Total 91.97 100 100
Privateproviders
Self-catering single15 19.7 22.0
Self-catering ensuite 81 73.5 71.2
Studio flat single
Studio flat double3
4.81.9
6.74.72.1
6.8
Total99 100 100
Nomination
Self-catering single35.9 22.1 22.5
Self-catering ensuite 64.1 75.8 75.5
Studio flat single
Studio flat double - 1.80.4 1.2 1.90.1 2
Total 100 100 100
Self-catered cluster accommodation
Self-catered single accommodation is the second most common type of student
accommodation, making up 33% of bedspaces in 2008-10. This represents a sizeable shift, as
this type of accommodation has been the most common throughout all previous surveys.
However, there may be a re-emerging demand for this type of high-density/low-cost
accommodation. Recently, some non-ensuite "eco" flats have been developed for larger
groups of students (10 to 12 sharing) with considerable success at Lancaster University and
Leeds Metropolitan University.xxvii
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Catered accommodation
Over the past 15 years, catered accommodation has declined steadily, but slowly. In 1994-95
27% of student accommodation was catered. By 2001 this figure had declined to 21% and
dropped further to 19% by 2004-05. By 2006-07 17.3%xxviii of accommodation managed by
education establishments was catered.
Figures for 2009-10 stand at 17.7%. It may be that the catered halls which have survived will
remain in service as an enduring part of the culture of the educational institutions in which
they sit. As accommodation continues to be developed, their share of the stock is likely to
continue to fall.
Shared rooms
Shared rooms have always occupied a small minority position in institutional portfolios. Over
the last 20 years they have accounted for between 2% and 4% of surveyed bedspaces.
International comparisons show that this is in stark contrast to some sectors overseas, whereshared rooms are a much more prominent feature.xxix
Although this survey only covered single rooms, some respondents did give additional
information on twin rooms, which totalled around an extra 1,200 bedspaces. Whilst this type
of room has become less common over the years perhaps because of issues around privacy
or cultural differences its persistence suggests that for some institutions and some students
it is still a viable and lower-cost option. Accommodation providers may return to it in the
future.
Shared rooms appear to be particularly prominent in London.xxx
International Student House,for example, a specialist voluntary sector provider in London, reports that shared rooms for
four students prove very popular, offering low-cost accommodation, located, in this case, in
central London.
The studio flat
The studio flat registered as 1% of the total stock in the 2006-07 survey. By 2009-10 this
figure has risen to only 2%. What growth has occurred has taken place almost entirely in the
private supplier accommodation (see figure 8). There is considerable "hype" around studio
flats, routinely described as "luxury", "premium" or "penthouse apartments". Although these
high-priced units are increasingly associated with the London market, the data reveals that the
2% level is fairly consistent across the country. Typically, outside London it comprises a small
number of units, located on the top floor of higher-priced buildings.
Specialist housing
The 2009-10 survey also looks at the availability of housing for specific groups, in particular for
disabled students and student families.
Given the stringent requirements under equality legislation,xxxi it was not surprising to see that
95.7% of institutional survey respondents provided accommodation for disabled students. For
private providers, this figure stood at 86.2%. This lower figure suggests that newer builds do
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not have disabled roomsper se, but are more likely to be convertible on request. As one
private provider commented in the survey;
Although rooms have not been specifically adapted for people with disabilities, all rooms are
accessible by wheelchair and adaptations could be made when required.
The total proportion of bedspaces for disabled students in the sector across 2008-09 and
2009-10 data is 1.4%. Given that an estimated 7.3%xxxii of students are known to have a
disability this would suggest a shortage in provision. However, many disabled students will not
have a need for physical changes to their accommodation, and where they do, their
accommodation may be provided through the local authority. Numbers of bedspaces ranged
from 179 to only one or two rooms in smaller colleges, although those with the highest
numbers of rooms for disabled students were not necessarily those with the largest stock of
accommodation. In terms of the numbers of bedspaces these percentages equated to 1% of
institutional accommodation and just below 4% of privately provided accommodation.
Family accommodation is less common in the sector, with only 17% of private providers and
32% of institutional providers making any provision. Numbers of bedspaces ranged from 306down to five across institutions that did have such provision. Numbers of family
accommodation places equated to 0.71% of bedspaces over 2008-09 and 2009-10.
Not all families will need accommodation, as many students will be studying at institutions
which are a commutable distance from their home. But such low figures would suggest there
are students with families struggling to find suitable, affordable accommodation. This shortage
may be attributable to family housing often yielding smaller profit margins than other student
housing. Institutions or private developers cannot charge rent per room for families as they
can with single students, so income is lower. Another possible reason is that family housing
rents need to be kept as low as possible, as the Governments periodic Student Income andExpenditure Surveys show that student parents have significantly higher expenditure than
most students.xxxiii
The balance between institutional and private providers in purpose-
built student accommodation
Institutionally-owned and managed housing still makes up the vast majority of purpose-built
accommodation. In the survey for 2009-10 78% of purpose-built provision fell into this
category. A further 12% fell under various institutionally-linked arrangements. Ten per cent
was provided and directly let by private suppliers.
A wider data set of information is available from the suppliers of the UUK and ANUK/Unipol
Codes of Practice which have wide coverage in the sector. Here, 69% of bedspaces are
directly provided by institutional suppliers with the remaining 31% being provided by private
suppliers. The definitions in this case are different to those in the survey because these
figures reflect who "controls and manages" the building. Almost all of these are HEIs. FECs
provide only around 0.5% of accommodation.
The expansion of privately provided purpose-built accommodation in the last two decades has
been rapidxxxiv
, but there are real difficulties in determining what counts as "private" and"institutional" when operational links and nomination arrangements through institutions come
into play.
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In the 2003-04 NUS Accommodation Costs Survey, 4.5% of student accommodation was
recorded as being private, reaching 19% in the 2006-07 survey.xxxv By 2009-10 it had fallen
to 10% but this reflects institutions "buying in" bedspaces which they then recorded as their
own. "Buying in" has been much more prevalent over the last three years with the significant
increase in student intake and HEIs recognising the competitive advantage of being able to
guarantee institutional bedspaces to all new students.
On the basis of the survey and the UUK/ANUK data sets, it is reasonable to conclude that
private provision currently stands at around 29% of all purpose-built provision still lower
than is often thought to be the case. Findings from the sector would appear to corroborate
these proportions.xxxvi They estimate that the market nationally is nearer to two thirds
institutional and one third private and nomination.
A prevalent view has been that private purpose-built student accommodation would become
the norm over the last decade. However, there is no doubt that the credit crunch and its
knock-on effect on the property market have halted developments outside Londonxxxvii
(although those in the pipeline in 2008 continue to come on line). Much of the apparent
growth of certain private providers has been achieved by suppliers selling stock between each
other.xxxviii
Planned expansion figures
From the respondents to this question, the majority of institutions responding to this question
(60%) had no changes in bedspace numbers planned for the coming year, perhaps reflecting
the current economic climate. A similar figure (59%) of institutions reported no changes
planned for nomination agreements. A quarter of respondents were planning to increase theirbedspaces (by a total of 2,988) and a further 12% had more bedspaces planned through
nomination agreements (totalling 584).
Only 3% of institutions were planning to decrease their own stock and only 5% were planning
to decrease bedspaces supplied through nomination agreements. Just over one in ten (12%)
did not know what changes would be made to their stock and nearly a quarter (24%) did not
know if any changes would be seen in their numbers of nomination agreement bedspaces.
Other significant developments shaping the product
Energy performance
The growing popularity of rent inclusions suggests that students prefer the system. But it does
raise the possibility that inclusion ill-equips students:
to rent in the private rented sector, either during their course or afterwards to be economic in their energy use
Since October 2008 landlords offering property for rent have been required by law to provide
prospective tenants with an Energy Performance Certificate for their property. EPCs areprepared by accredited energy assessors and are intended to show prospective tenants the
energy performance of the building they are planning to rent. Landlords are required to
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provide an EPC at the point of marketing to prospective tenants and to tenants when they sign
for the property.
An EPC is compulsory for all rented accommodation except where parts of a house or flats are
let on single tenancy agreements. For the purposes of student lets, this exemption creates a
significant gap in the initiative, arguably sufficient to compromise its objectives.
As recorded elsewhere in the report, including energy costs in rent helps students to manage
their budget. However, it can have the effect of keeping hidden practical issues around energy
economy and of dis-incentivising tenants from keeping fuel usage down. In this context, EPCs
can be a useful tool in raising awareness of energy consumption. It is therefore of concern
that only 15% of major commercial operators and 24% of institutions give this information to
students. Twenty-nine per cent of private providers and 18% of institutions did say that they
would provide this information on request, which would indicate that this information is
available.
Projects such as student switch off have proved useful in promoting more energy efficiency instudent accommodation and in delivering energy savings.xxxix Unipol offers a pay-as-you-go
energy meter, which encourages their tenants to utilise energy responsibly. In some of their
newer developments, UPP provides real-time energy monitoring. As environmental concerns
grow in the public consciousness, it may be that such green mechanisms are the way of the
future.
Accreditation
Almost all institutions and private providers recognise the importance of voluntarily agreeing to
a set of standards and being held accountable to such an agreement through accreditation.
After students have lived in institutional accommodation most students choose to live in what
are termed off-street properties (smaller houses) in the community. It is important that
institutions recognise they have an important role to play in monitoring and promoting both
physical and management standards in these properties through the active development and
extension of accreditation for their students.
Such promotion takes into account the specific needs of student occupants, health and safety
considerations for higher density living arrangements and the high levels of supportive
management required. It also entails promoting the schemes in partnership with local
authorities, local landlords and students' unions.
It is pleasing to report that 48% of institutions surveyed ran or were working with an
accreditation scheme which acknowledged this wider commitment to housing standards. For a
list of those institutions that ran or worked with an accreditation scheme, see page 59.
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Are students getting what they want out of the market?
It is clear that the student market is shifting, that a new student housing product has been
developed, and a new kind of student landlord has emerged. Student housing is becoming very
big business but it remains to be seen how far this development serves the interests of
students seeking to minimise their accommodation costs and so reduce the level of
indebtedness on graduationxl
What do students want, and what are they getting?
The trend to provide a higher specification of accommodation may have acted as a double-
edged sword: improving standards has corresponded with considerable rises in development
costs and rents.
Housing is a highly complex amenity. Tenant satisfaction levels do not necessarily increase
even where providers appear to respond to student need. However, a number of student-
focused surveys highlight some key areas of concern for students regarding their
accommodation.
Value for money
Research by CUBO in 2008xli showed that 93% of student respondents rate accommodation
cost as very important, and over a third of all undergraduates and postgraduates are
dissatisfied with the cost of their accommodation. This suggests that a proportion of students
are not happy about what rents they are paying, or they think they are not getting value for
money.
The cost of living away from home is substantial full-time students reported spending an
average of 6,496 on living costsxlii (other than their course and housing) over the academic
year 2007-08.xliii Furthermore, students from lower socio-economic groups were reported as
having substantially higher living costs.xliv
As this survey shows, the vast majority of accommodation is self-catered, and the most
common rooms are single, either with shared bathroom facilities or with ensuite. As average
rents for ensuite accommodation are 19-24 higher per week than those with shared facilities,
there is clearly a tension here.
Accommodation now on average accounts for nearly all of an average students income from
loans and grants, in some cases exceeding it. Substantial increases in rent have persisted
through boom and bust. However rental increases appear to have slowed between 2008-09
and 2009-10, suggesting that students may be resisting ever-increasing rents. This is quite a
contrast to other reports on the student housing market:
The [student housing] market is now estimated to be worth 6.6bn and we expect it to grow
to over 20bn with a further 78,000 bedspaces delivered to the market over the next six
years.xlv
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Quality
Students clearly want accommodation to be affordable. Ninety-one per cent also rated quality
of accommodation as very important. This highlights the complex balance between raising
accommodation standards without allowing rents to escalate beyond realistic levels of
affordability. For example, access to broadband facilities rates consistently as a top priority for
students.xlvi
However providing good quality accommodation does not necessarily entail the automatic
provision of ensuite facilities, double beds and gyms. Quality is about providing a good range
of well-managed accommodation in a good state of repair. Indeed, research carried in
Nottingham in 2008 highlighted that whilst nearly a third (32%) of first-year students
considered ensuite accommodation important, this figure dropped to 15% for returning
students.xlvii
A false market?
As this survey has shown, self-catered and self-catered ensuite provision represent the most
common types of accommodation. Despite evidence that ensuite accommodation is not the
top priority for most students, and decreasingly important to returning students, it appears
that ensuite provision is still what is being commissioned despite evidence that it:
is not the top priority for most students becomes less and less important for returning students
Whilst there is still a range of accommodation options including shared rooms, catered
accommodation and studio flats with only one or two people sharing kitchen, bathroom and
living space these are in evidence in much smaller numbers. This is not to say that the
addition of ensuite accommodation and enhanced specification are not welcome indeed there
is clearly a demand for such housing amongst students. Ensuite accommodation can also be
significant in terms of meeting the needs of a diverse student body many students perhaps
requiring private bathrooms for a number of reasons.
There are a number of factors which may be behind the current preference for developing
accommodation with ensuite facilities:
marketing through websites and to students on open days parents wanting the best for their children and exerting their influence accordingly better financial returns ensuite accommodation being the newest available
Potentially, a gap is developing in student accommodation between what students need and
what is being developed. If student accommodation does not match what students need or
can afford, this may cause more students to explore alternatives to purpose-built
accommodation, for example staying at home or opting for off-street properties.
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Are students staying at home more?
The number of students staying at home has increased markedly over time. In the academic
year 1984-85, only around 8% of first-year students were living at home whilst studying. By
2006-07 this figure was up to 20%.xlviii However, given the burgeoning student
accommodation sector and a shortage of student accommodation, this may suggest that
student accommodation is still being filled with students of a certain profile.
Traditionally, institutional accommodation was the norm, as discussed earlier in this report.
However, the evidence suggests that, for the student body as a whole, this is not the case
(although it remains so for first-year students). According to the latest figures, 23% of
students are living with parents or relatives. This is 1% more than those who live in halls.
One reason for this might be cost research by the UK Youth Parliament shows that over a
third of students look for courses closer to home to reduce costs.xlix
Research by the Higher Education Funding Council for England and Wales suggests that staying
at home appears to be more common amongst certain groups. These include students:
from certain Black and Minority Ethnic (BME) groups from lower socio-economic groups with a disability but not in receipt of Disability Living Allowance (DLA) living in Londonl studying subjects allied to medicineli and those living in other areas of the UK such as Scotland lii
Whilst it is not possible here to explore in detail why this might be, it may be that
accommodation does not suit certain groups because of location, cost, or design. There arelikely to be a number of reasons for the increase in students opting to stay at home during
their course. Significant factors in making this choice may be one or more of:
family commitments (lack of) financial support differing cultural norms
For some, living at home will be their preferred choice, irrespective of other factors liii. In any
case, this would suggest that the choices of where to study are narrower for some students
than for others.
Are more students choosing off-street properties?
Some returning students stay on in purpose-built accommodation because they like what it
offers:
the level of amenity all-inclusivity being in a student environment safety and security the relatively young age of the stock.liv
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However, research suggests that most returning students still choose to move into the PRS for
the rest of their course.lv The NUS Student Experience research suggested that only 19% of
returning students were housed in purpose-built accommodation, compared to 50% of first-
years.lvi This would appear to back up the general assumption that students in the main still
leave student accommodation after their first year and move into the private rented sector.
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Looking to the future
Overview
Predicting changes that may emerge in the sector is difficult, and is made more difficult by:
the volatile economic climate cuts to education budgets question marks over the future student contribution to tuition costs a relatively high level of uncertainty from the accommodation sector itself
Notwithstanding this, some assumptions can be made in the context of:
the resilience in the growth of student numbers within the sector, particularlyinternational students
plans by the Department for Business, Innovation and Skills for a New UniversityChallenge: Unlocking Britains Talent, an initiative which aims to bring the benefits of
local higher education to bear across the country
what we know about the accommodation currently on offerThese challenges may elicit a number of responses from the accommodation market and
suppliers. A number of prognoses can be constructed which reflect different views of what
might happen:
education institutions, suffering funding cuts, may turn to a greater extent to theprivate sector to upgrade and continue developing their accommodation
education institutions, suffering funding cuts with stabilising home student intakes, maystop developing their accommodation portfolio
the private sector, suffering higher loan gearing as capital asset values have fallen, maycease development until their gearing is reduced, maximising their revenue return (as
has been discussed elsewhere), or
new developers, unfamiliar with the student market, may see yields within the studentprivate sector as a good investment compared with other commercial property
development, and this would see increased speculative development taking place
Not until the next survey in 2013 will these outcomes be clearer. Below, however, are some
suggestions of different directions the market may develop in.
Purpose-built accommodation
Purpose-built accommodation currently serves mainly first-year students, together with some
returning (often older) and international students. Although there are cities where returning
students live in purpose-built complexes (such as Bradford, Manchester and Liverpool), this is
still not the norm. In some cities the number of returning students being housed has reduced
as the number of first-year students has risen.
Recent planning changes, where all HMOs will need planning permission, would seem to
indicate a shift of public policy towards discouraging the continued development of off-street
housing for students. It might be expected, therefore, that this would result in planning
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policies that are more favourable to the development of purpose-built complexes, but here
planning requirements are also increasing. The London Plan, for example, has recently
suggested that various charges should attach under Section 106 arrangements to private
student accommodation developments. Overall, the planning environment for both student
complexes and off-street properties is becoming more restrictive. This may discourage the
high-density development that has been a feature of student accommodation over the last
decade.
If purpose-built student accommodation is to expand, it will do so either where there are
already accommodation shortages and pent-up demand or future supply will need to appeal to
a wider group of returning students as a serious accommodation option.
To be attractive to returning students a number of issues need to be addressed:
where should the developments be located? how will developments interface with existing local provisions? what amenities do students require and want, and how are the demands of
returning students different to first-year students?
how does this impact on the overall cost of the accommodation? to what standard will the accommodation be managed and maintained?
The higher-priced ensuite development will need to give way to a lower-cost, more
communally-shared type of accommodation with larger living spaces that is not associated
with first-year students. It will be interesting to see whether the sector can rise to this
challenge.
Nomination agreements
In responding to government cuts in HE funding, institutions are likely to require efficien