Lettings Notes

Unipol Student Homes

The UK Student Accommodation Forum, Thursday 22nd October, 11 AM-12 PM

Theme: Lettings

Guest Speakers: Martin Blakey (CEO, Unipol Student Homes), David Feeney and Sarah Jones (Cushman and Wakefield)


Hot Topics

  • We’re now in to the main part of term and are now entering into a ‘settling down phase’
  • There was an initial burst of social activity to replace the traditional Freshers period, during which there were high levels of transmission – this rate of transmission is now falling
  • Many groups of students are ending their self-isolation periods now and over the next week
  • Partying and socializing seems to have calmed down – social gatherings aren’t now been held in the same way
  • There has been an increase in the number of students getting tested compared to the start of term
  • It seems there now may be more socialising and mixing of households in off-street/private housing than in PBSAs – second peak of social activity in private rental sector after initial burst seen in July
  • There is new guidance regarding lockdowns on the Information and Advice on Coronavirus in Student Accommodation for Housing Suppliers page.
  • Levels of attrition do not seem to be any higher than normal – the odd person is leaving, but these rooms are in fact being filled
  • There have been a few requests and enquiries regarding rent refunds, but not to a level that may have previously been expected
  • No solid plans currently on how the end of term will look yet – this could be a decision that has to be taken at Cabinet level

David Feeney and Sarah Jones

Looking beyond the headlines:

  • There was promising news for Providers in August, with overall acceptances up 4% according to UCAS data
  • However – acceptances doesn’t guarantee students will arrive and enroll, and there is the ongoing issue of postgraduate courses, with half of internationals being postgraduate students
  • According to British Council data –
    • Chinese UG cancellations/delays are at 26%
    • Chinese PG cancellations/delays are at 27%
    • Further 27% of PGs are uncertain
    • 65% of Indian students not cancelling
  • Given the uncertainty for Providers over demand from international students for higher-end accommodation, there is now a decision has to be made as to whether to service the UK-home market better now Providers cannot rely on the Chinese market


Tales from the market:

  • London market is proving to be extremely difficult – Providers note that even if they slashed rent prices in the Capital it would make no difference, the demand just isn’t there
  • Large providers are running at around 70-75% capacity
  • The Russell Group Universities are performing strongly – massive gains from fallout of A-level fiasco
  • Increasing prevalence of January postgraduate course start dates, which is pushing back arrival dates and increasing need for flexibility from Providers
  • Popular questions from students – Can I arrive in term 2? Can I get out of my contract?
  • However, most students don’t seem to be deterred by COVID -  they still want to move out of their family homes to study and have the full experience, so the level of demand is sustained
  • E.g. an example of a University’s projections in terms of student numbers was shared:
    • Pre-COVID: predicting 5% growth
    • Revised estimate post lockdown announcement: -15%
    • Current standing: -1.5% off target

Providers 2020/21:

  • There are approx. 24,837 new bed spaces for this Academic Year, with 1/3 based in the Midlands – 25% less than 2019
  • 4,000 new bed spaces in Coventry alone – concern here as a large amount of Coventry’s market is PG based
  • 10 markets homes to 60% of discounted schemes
  • 5 large cities have seen discounting in 1/3 or more beds
  • Higher quality developments are more likely to be discounted this year
  • Bath, Bristol, Nottingham and York have seen no discounting – this however doesn’t take into account the possibility of voids

Rental Growth:

  • Rental growth had been muted even before discounting
  • 2.6% growth in 2019, 1.8% in 2020
  • There are questions being raised as to whether there will be any rental growth in 2021
  • Providers with dynamic pricing structures will come into play
  • New bed prices are 5% higher than in 2019 – an increase from £154.47-£169.29


Closing questions and discussion

  • Providers have done a fantastic job at giving students reassurance and confidence about measures taken to be COVID-19 safe
  • The messaging and procedures employed by providers prior to arrival and during welcome have been spot on
  • In terms of outlook, market fundamentals remain strong
  • However, recent messaging in the media has the potential to damage the sector, despite all the positive moves made by providers to improve the student experience – good news stories have got to travel, and there must be a joint sector-wide effort to ensure this happens
  • Next year could see a boom in student numbers due to number of deferrals – there are also demographic changes as the number of 18 year olds begins to increase
  • It has been a far better year for bringing new buildings online despite COVID-19