Student Rental Demand Seen Recovering in the 2021-22 Academic Year
With expectations growing that learning will be more 'normal' in the coming academic year, data suggests that demand for university housing will post a strong recovery from the patchy 2020-21 performance.
A return to face-to-face learning is already lifting demand and that is expected to grow as more students secure their home for the next school year.
Meanwhile, separate research highlights that demand is finally returning to the London rental market as more offices begin to detail their re-opening plans and also as tenants take advantage of still relatively lower rents. Tellingly, corporate re-location demand has risen notably, with larger properties with their own outside space proving to be the outperformers of the city scene.
Most Popular Universities
As many students and landlords of student properties begin to look towards the 2021/22 academic year, activity in the student property rental sector is on the up. According to online university housing specialists, UniHomes, St Andrews University in Scotland and Cambridge University are both proving popular with student house hunters. Its research shows that some 60% of student housing in those areas has already been secured for the coming student year.
The remaining three universities that make up the top five most popular locations in terms of student rental activity are:
- Nottingham University with 44% of student property already rented.
- The University of York where 42% of student homes have been secured.
- Glasgow University is equally popular, also with 42% of student accommodation no longer available.
UniHomes states that while demand is already high, particularly in some university cities, there is still plenty of supply available in all of the top 100 universities in the UK. The student accommodation specialist adds this increase in demand will provide a boost for student landlords and also, the broader UK economy.
Signs of Recovery in London Rental Market
The student rental market isn’t the only one that’s showing signs of life in the early summer months of 2021. Research shows that average rental values across prime London locations rose 1% in the second quarter of 2021 as some two-thirds of agents from upmarket property firm Savills reported an increase in corporate relocation activity over the period. The report shows that demand grew for both flats and houses.
In addition, stock levels are also declining due to a combination of new rental agreements, landlords exiting the market, including accidental landlords choosing to sell-up while buyer demand was boosted by the stamp duty holiday.
Family homes with outside space were the most sought-after rental properties in Q221, according to Savills, with average rents for five bedroomed or larger houses rising by 1.9% compared with Q1 and up 2.6% from a year earlier. Average rents for London homes with large gardens, regardless of bedroom number, meanwhile, rose 2.0% in Q2 from Q121 and were 3.6% higher than in Q220.
“Since the start of the year we’ve seen people begin to return to London and stock levels have slowly been coming down from their very high levels at the start of lockdown,” said Jessica Tomlinson, Savills research analyst. “But this is the first clear signal that prime rental values have resumed their steady upwards trend from the 2016 low that was curtailed by the March 2020 market shutdown.
As demand and rents rise across different segments of the UK’s rental market it provides a welcome boost for the market and also the broader economy. Of course there will likely be a few more bumps in the road as the UK emergence from the coronavirus pandemic isn’t expected to be smooth, but demand for rental homes shows that some confidence is returning.