UK student housing update following A-level results day

An update on the demand outlook for the UK student housing sector following the release of this year’s A-level result for students in England and Wales. The new academic year presents a chance for the student housing sector to resume following the disruption caused by the pandemic in March.

The latest set of A-level results are expected to trigger an active period for the UK student accommodation sector as students race to secure tenancies for the upcoming academic year. The sharp increase in applications between January and June has led to a 2% increase in UK applicants this year, while participation rates are at their highest level on record amongst UK 18-year olds. This goes against the underlying demographic decrease amongst this age group in recent years and defies predictions of the impact of COVID-19.

As of 30th June 2020, UCAS data showed that over two thirds of applicants had still not confirmed their final offers, a 10% increase in unconfirmed places compared to 2019/20. However, the first clearing data shows that UK acceptances are up by 2.9%, while non-EU acceptances are up by 2.0%. Although EU acceptances have fallen by 15.2%, overall acceptances on A-level results day are up by 1.9% year on year.

With universities subject to a temporary 5% cap on how many students they can take for the 2020/21 academic year, many students will now be facing strong competition given that 78% of students achieving grades A*- C (up from 75.5% in 2019). The recent GDP and employment data and the disruption caused by several months of national lockdown means that deferrals are not expected to increase. This will give many universities the opportunity to fill their places with high quality students.

Furthermore, the government has announced that any student appealing their decision will be exempt from the cap on places which may help to underpin demand. Although 40% of students received grades different from their teacher’s predictions, 97% of all students are within one grade. The introduction of the triple lock and universities taking a more relaxed approach to selection is also welcome. So far, the government will not reissue downgraded students the grades predicted by their teachers, as was the case in Scotland, however public response over the forthcoming weeks may lead to additional updates from central government.

As before, much still rests on how many international students turn up for the start of term. There have been tentative signs that demand from this group has held firm, despite some initial concerns about the impact of COVID-19. UCAS figures from the 30th June deadline showed international applications up by 5% when compared to the same time in 2019/20.

Overall, leasing activity for purpose-built student accommodation remains strong. To date, over 70% of private PBSA beds have already been let for the new academic year, according to JLL’s Student Housing Leasing Survey of over 145,000 beds, equivalent to 45% of the private market. Total bookings are ahead of where they were 12 months ago, largely as a result of existing students rebooking, and demand from new students is also up.

Following the disruption to the sector in March and April, the flurry of leasing activity expected in the coming weeks, as students settle on their courses and look to secure accommodation ahead of the new academic year, is expected to be positive for the sector. The results today further suggest demand will remain in the short to medium term, providing some much-needed relief to investors.

Philip Hillman, Chairman, Living Capital Markets, comments:

“There is still uncertainty around how things will look once the new academic year gets underway in September, but after a significant period of disruption there are some encouraging signs.  The longer-term outlook for student housing remains strong and it will continue to be driven by the same underlying counter cyclical factors that has attracted so much investment in recent years.”


James Kingdom
Associate - UK Living Capital Markets Research

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