Student accommodation website Accommodation for Students has released its annual report on the costs of student accommodation. It says the average rental value (ARV) in this sector has fallen by 37 pence, from £79.64 per week per bedroom in 2013 to £79.27 in 2014.
In comparison to the rest of the market, which has risen on average by 2% over the last year (according to report by LSL Property Services), the student sector has remained stable as a result of a relatively competitive market, which will be welcome news to those students actively seeking last minute accommodation ahead of the start of the new academic year.
As expected, high rents remain concentrated in the South, the South Coast, Kent and Greater London, although rents have actually increased more in the North (+ 3.6%) and decreased (- 3.5%) in the South.
London remains the most expensive location for student accommodation with an ARV of £136 per week per room, up 5% on last year, followed by Kingston (up 8% to £108) and Winchester (up 6% to £107), all of which have held top ten positions for the last three years.
The Midlands and North West show reasonably low rents, with examples such as Wolverhampton (£58) Derby (£65), Stoke (£65) and Bolton (£61), all offering rents some 22% lower than the UK average. There is more variability in the North East with rental values ranging from the average lowest of £50 in Stockton, to £88 in Durham.
This suggests regional trends are not strong and the student rental market is more city-dependent. This can fluctuate depending on popularity of university, based on courses available each year. As an example, Newcastle-under-Lyme saw this year’s greatest increase, up 26% on 2013, although still offering a below average rental value of £76. Nearby Stoke remains some £10 cheaper.
Each with an ARV of £80, Bournemouth and Luton saw this year’s greatest falls in average weekly rent, down 11% and 12% respectively.
The lowest recorded rental value was £17 per week per room located in Coventry, and the highest was £199 per week in London, meaning the UK rental range is £182. This is £32 greater than in 2013, suggesting a widening gap in UK rents.
The percentage of properties offering ‘bills inclusive’ in the UK is 51%, a figure which has steadily risen since 2005. There is an average addition of £7.21 per week per room for this option.
Simon Thompson, director of Accommodation for Students said: “There is more choice in student accommodation than ever before, from the basic bedroom with a bed and desk to purpose built blocks offering on-site gyms, launderettes and games rooms.
“Although figures suggest there is a widening gap in the student rental market, factors such as the facilities on offer and whether bills are included or not, have to be taken into account. Budgeting can be a major stumbling block for young people who have just left home for the first time, so it is encouraging to see that ‘bills inclusive’ accommodation is on the rise.
“Overall, increased competition has helped stabilise rents, which is good news for students, but also for landlords, who can be reassured that the student rental sector remains robust and is still one of the most attractive yield classes for property investment.”