A recent survey has confirmed that 2020 and the early months of 2021 have been difficult for the student letting sector, as average rents and demand for student rental homes declined notably. However, while it has been tough time for many sectors during the pandemic, there are signs that the student lettings industry could begin to recover this year.
Britain's largest student accommodation provider, Unite, has warned that with some students now back in face-to-face teaching, other students are increasingly fed up with Zoom calls and plan to move back into student digs. In addition to this, a new student accommodation development has been approved in the popular university city of Nottingham. Together, this suggests that amid signs the worst effects of the pandemic are fading in the UK, students are very much among those parts of society who are ready to return to some sort of normality within student life.
Student Rents Slide
With uncertainty blighting much of the UK’s economy, the student rental sector has been among those which have suffered. Research shows average student rents have declined from £1,350 per property in September 2018 and 2019, to £1,000 in September 2020. This mean that after accounting for a fifth of every pound spent on rent in 2018 and 2019, the student rental sector was the recipient of just 14p in every pound spent on rent in 2020.
The year 2021 has also started off sluggishly for student landlords, with private landlords seeing a 37% decline in rents achieved in the first two months of the year compared with the same period in 2020, just before the pandemic began in the UK. However, even as student lettings have been less popular or profitable over the past 12 months, there are hopes that from September 2021, things will improve.
Goodlord, the proptech firm who has analysed the data, is optimistic for the next academic year. “We predict a big boost to demand from the summer onwards if universities confirm plans for what’s hoped to be a more ‘normal’ academic year,” said Tom Mundy, Goodlord’s COO.
Supply and Demand Boost
Goodlord aren’t alone with that outlook for stronger demand for student properties in the next academic year. A recent survey by student property provider Unite shows that more than three-quarters of students are keen to get in some face-to-face teaching and also to move back into a student property, possibly as soon as the summer term of the 2019/2020 academic year.
The firm also told shareholders that around 65% of their student tenants had returned to their student properties, a figure they expect to rise once the UK moves to its next phase of removing lockdown on March 29th.
Indeed, the student accommodation provider’s confidence in a return to more ‘normal’ normal student life is such that it has recently had plans approved for a new 700-bedroom student development in Nottingham.
“We are delighted to have secured planning approval for this exciting development,” said Unite Students’ Group Property Director, Nick Hayes. “The development supports our strategy of increasing our alignment to the strongest universities and will help to deliver operational efficiencies through greater scale in Nottingham.”
The development in the popular student city underscores the firm’s commitment to the industry and also, its confidence that student life will once again be available to those studying away from home, around the country. That’s in line with the hope from a variety of sectors that some form of normalcy will return as the vaccination roll-out continues apace and the economy begins its phased unlocking. Only time will tell if those hopes are fulfilled.