London has so much to offer students who choose to study in the capital. The appeal of studying at the city’s world-class institutions has significant international and domestic reach.

Nick Hayes

Nick Hayes

Choice is also increasing, with a growing number of UK universities, such as Loughborough, opening satellite campuses in London.

But it is not just about the education. From South Kensington’s leading art galleries and museums, the West End’s award-winning theatre, to Soho, Shoreditch and Borough’s top eateries and creative buzz, London offers a vibrant, world-renowned culture, making it one of the most popular destinations for young people globally.

London is the UK’s largest student market, and growing, but has a significant accommodation shortfall. In the 2022/23 academic year, Unite Students expects the number of full-time higher education students seeking accommodation to reach almost 280,000, but there will be just over 102,000 PBSA beds to rent – a shortfall of almost 178,000.

This gap is expected to grow to just over 194,000 by 2026/27, as supply fails to keep up with demand and we see significant demographic growth of 18-year-olds and record demand for higher education. University applications for 2022/23 are 7% up on pre-pandemic levels, the latest UCAS figures show.

This is compounded by the lack of high-quality, affordable houses of multiple occupancy (HMO), which are increasingly expensive and not up to the standard today’s students expect and deserve – especially as environmental standards and EPC certification requirements increase.

There is a huge opportunity for student accommodation providers to meet demand across London. This is particularly true in Stratford, east London, where both UCL and University of the Arts London are developing new campuses.

We have invested significant sums in London and anticipate that our weighting towards the capital will increase to around 45% of our portfolio over time. This year, we are due to complete our scheme at Middlesex Street in Aldgate East for the 2022/23 year, providing 900 beds in a prime central London location to meet demand there, while our secured London pipeline includes almost 4,000 beds across schemes in Stratford and Paddington.

Although London is a strategically important location for students, it is also one of the most difficult places to deliver new supply. Competition for land is intense and build costs are increasing as supply chains remain disrupted in the wake of Covid-19.

Furthermore, the London Plan requires most rooms to be secured on nomination agreements with a university, with rent for at least 35% of rooms set at an affordable level. To facilitate this, Unite Students is working alongside leading institutions, including King’s College London and UCL.

PBSA is also an important part of the city’s overall housing mix and, across the UK, student spending supports more than £80bn of UK economic output. In London, there is considerable unmet demand for housing and many students live in houses that could otherwise accommodate families. The National Planning Policy Framework and Greater London Authority associate 2.5 people per HMO. So, for example, if Unite Students built a 1,000-bed scheme in London, this could free up to 400 homes.

Core to Unite Students’ purpose is ‘doing what’s right’. As part of this, we are committed to ensuring that our schemes support and enhance communities, be it through local community projects, preserving archaeological discoveries – as was the case in Middlesex Street – or making a positive environmental impact and becoming net zero by 2030, in addition to providing all our students with a home for success.

It is really exciting to think what lies ahead for development in London so that more students can study and benefit from their experiences.

Nick Hayes is property director at Unite Students