Maintenance loans for South Coast universities failing to cover rent, finds CBRE

Headline rents for student accommodation across major university towns and cities on the South Coast are now outpacing maintenance loans, new data from real estate adviser CBRE has revealed.

The firm analysed the purpose build student accommodation sector (PBSA) in the UK’s 30 major university towns and London.

It found that Southampton and Brighton have the highest average rents, ranging from £210 to £285 per week and £285 to £341 per week respectively.

Students in Winchester pay an average of £215 to £274 per week.

Outside of London, the maximum maintenance loan that can be secured by each student is £10,227 per annum.

However, in Southampton, the average rent for an ensuite room (where kitchen/living space is shared) is £10,500 per annum, and a studio (fully furnished accommodation, with own kitchen and bathroom) is £14,200 per annum.

In Brighton, the average rent for an ensuite room is £14,250 per annum, and for a studio, it’s £17,050 per annum.

Emma Eaglestone, senior director, living valuation and advisory services at CBRE Southampton, said: “What we’re seeing in the market reflects the limited good quality student accommodation to house the growing number of students.

“The build to rent schemes in our university towns and cities have gone some way to alleviate the pressure and have provided additional quality housing mainly for overseas students, but there’s still a lack of good quality accommodation.

“We’ve also seen some secondary providers filling in for the PBSA sector.

“With numbers of students expected to rise over the next few years, we expect to see the development of student accommodation increase to accommodate these growing numbers.

“It’s important that our university towns and cities in the South remain attractive to students to ensure a qualified talent pool for employers.

“The availability of accessible accommodation is fundamental to this.”

CBRE also found that average weekly rents for student accommodation across the South have been continuously rising over the past four years – particularly in one Hampshire city.

Southampton has around 30,000 students, with only around 13,700 dedicated student beds.

The average weekly rent for a studio has increased by 50 per cent since the academic year 2021/22, from £189 to £284 in 2024/25.

For an ensuite room, the average weekly rent has increased by 40 per cent, from £149 in 21/22 to £210 in 24/25.

Constrained supply and a fall in the delivery of student beds to the market have exacerbated rental growth in Southampton and beyond.

CBRE predicts that by 2028, the market could face a potential shortfall of 620,000 student beds across the UK, relative to the 36,000 beds currently identified as being delivered in that period – assuming the student population grows by 1 per cent a year for the next three years.

Tim Pankhurst, head of student accommodation valuation at CBRE, added: “As maintenance loan growth lags and the cost of attending university grows, we could see a shift in where students choose to go.

“More than ever, the cost of living is becoming a key decision driver for domestic students when deciding where to apply to study.

“The loss of house in multiple occupation (HMO) homes has constricted supply further, driving up prices for existing accommodation and PBSA beds.

“Some universities are struggling to house their students in the same city.

“We need to encourage the development of student accommodation and increase its provision, so it’s affordable and accessible for all students.”