By Daniel Hunter
Accommodation for Students has released its latest research into student accommodation costs, which reveals that the average rental value (ARV) for student accommodation has risen 3.1% from £77.04 per week per bedroom in 2012 to £79.42 in 2013. However, this average rise is being driven predominately by soaring rents in the South.
The research is based on its UK-wide table of rents on over 125,500 properties in 92 locations. In line with the previous 3 year average, there is a notable North-South divide in both rental price and 'bills inclusive' options (any property that includes at least one bill).
A recent survey by AFS revealed 70% of students prefer an 'inclusive bills' option to help them keep track of their finances, the availability of which has more than doubled since 2008. Whilst such stock is specific to individual rental markets and does not follow a specific pattern, research shows that there is an average addition of £8.08 in the South but £5.51 in the North for this option.
Despite a modest 2% fall, London continues to lead the way with an average rental value of £129 per week, followed in second place by Egham at £115. The third most expensive location, Newport, has seen this year's biggest hike with rents doubling from £56 to a massive £113. Winchester and Middlesex also weigh in with average rents over £100 per week.
Interestingly, in some of the country's most sought after northern university locations, including Manchester (£74), Leeds (£74), Sheffield (£69) and Nottingham (£76), rents have stayed the same or even fallen and all sit more than 6% below the national weekly average. However, there are some exceptions such as Middlesborough, which has risen by 18%, and Salford, up 15%. This year's best value locations for student rental accommodation are Walsall, Stockton and Wolverhampton with average weekly rents of £48, £49 and £52 respectively.
In contrast, those that have seen some of the greatest increases are all based in the South with Luton up 20% from £71 in 2012 to £91 in 2013. Chatham, home to the University of Kent, has seen its average student weekly rent increase 19%, from £73 to £87, Bournemouth is up 16% to £90, and Bath and Southampton have also seen 10% rises.
These locations all sit between 5% and 15% above the national average. The major exception to this is Uxbridge, which despite being located within the London Commuter Belt and last year charting as the third most expensive place for a student to rent, has this year seen rents fall by a staggering 28%, from £100 to £78. Kingston has also seen a fall of 12%, yet with rents at £100 it still remains the sixth most expensive location, down from second in 2012.
Private hall developments are popular in the UK as an alternative to university-owned accommodation or private student houses. Average rental value in private halls of residence has risen 1.5% and on average they are 63% higher in rental value than student houses: £129.45 vs. £79.42. Similar to private houses, average rental values for private hall developments in England demonstrate a clear North-South divide.
In northern England almost all cities offer below average ARVs with the exception of Chester, Newcastle, Durham and York. The lowest ARVs are all found in the North with Hartlepool, Hull and Bradford offering £79, £81.50 and £86.70 respectively. The South is predominantly average or above average ARVs with a clustering of high price developments around London, with Kingston (£263.37), London (£250.29) and Egham (£217.22) offering the highest ARVs in the UK.
"The student accommodation market remains robust and is still one of the most attractive yield classes for property investment. We are still seeing large scale development in student accommodation up and down the country," Simon Thompson, Director of Accommodation for Students commented.
"Demand for places at well renowned academic institutions is clearly having an impact on Student Rents but with reports that some universities are offering incentives as a way to fill spaces and entice the brightest students - from generous scholarships and bursaries to laptops and gym memberships, it will be interesting to see what impact this has on future accommodation demand and subsequently rents, in such locations."
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