How will the university application fall affect the student rental market?
The number of people applying for UK higher education courses in 2017 has fallen by more than 25,000 (4%) compared to last year.
The decline in university applications follows the announcement that university fees will increase from £9,000 to £9,250 this year, and student loan interest rates will be increasing by 1.5% (from 4.6% to 6.1%) this Autumn.
But how will it affect the student rental market and student landlords? Research by student property letting specialists, StudentTenant.com, uncovers a growing crisis for student landlords struggling to secure tenants for the next academic year, which seems to be a drastic shift from an undersupply in previous months.
Despite university starting in less than two months, landlords are still trying to secure student tenants in a number of key university areas. Demand for student properties in Exeter is just 62%, followed by a two-way tie between Reading and Bath with a demand of 52%.
Danielle Cullen, Managing Director at StudentTenant.com comments: “As we're coming into the summer months, student landlords are starting to feel the strain of finding tenants for the next academic year, as many still have rooms left to let. I personally feel the blame sits firmly on decisions made by our government.
Another increase in university fees, and an announcement that student loan interest rates are going to increase shortly, is evidently putting young people off higher education. Higher education is seemingly becoming an unattractive option, which has had an evident impact on student landlords.
We’re now seeing supply for student properties outgrowing demand in some areas, which could spell a huge problem for the student lettings market and the future of private student landlords. This is a complete shift from previous research we carried out earlier this year and last year, demonstrating an undersupply. There will always be areas where there is an undersupply of properties for a number of different reasons, but there has become an unusual trend developing in some locations where properties are always occupied by this time of year.”
Four nation breakdown of UK higher education applications:
England - 437,860 applications from students - down 5% from 459,430 last year
Scotland - 48,940 - down 1% from 49,470
Wales - 22,530 - down 4% from 23,740
Northern Ireland - 20,290 - down 4% from 2,110
Further, following the Brexit vote last year, the number of EU students planning to study in the UK has also fallen by 5% from 51,850 to 49,250.
Danielle continues, “Whilst the fees and interest are having an impact on British applications, it seems that post-Brexit, some EU students don’t want to study in the UK. A year on, there’s still uncertainty for EU students. Naturally, they’re worried about how it could affect them and they’re not applying to our higher educational system as a result.
Experts previously predicted a fall in EU higher education applications, and it’s finally come to light as a reality. Our government must react to these findings quickly, and take steps to ensure that we remain a welcoming and attractive place for foreign students.”