University affordability in Portsmouth worsens

Currently, average rents range from £180 to £221 per week. The average weekly rent for a studio (fully furnished accommodation, with its own kitchen and bathroom) has increased from £197 in 2021/22 to £221 this academic year (24/25) – an increase of 12%, while the weekly rent for an ensuite room (where kitchen/living space is shared) has increased by 8% from £166 in 21/22 to £180 in 24/25.

CBRE analysed the Purpose Build Student Accommodation Sector (PBSA) in the UK’s 30 major university towns and London. The analyses revealed headline rents for student accommodation have outgrown and outpaced maintenance loans, as the shortage of accommodation and student beds intensifies.

Outside of London, the maximum maintenance loan that can be secured by each student is £10,227 per annum. While the average rent for an ensuite room in Portsmouth per year is £9,000, the average rent per year for a studio is £11,050.

Emma Eaglestone, Senior Director, Living Valuation and Advisory Services at CBRE Southampton, said: “What we are 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 is still a lack of good quality accommodation. We have 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 there is a qualified talent pool for employers. The availability of accessible accommodation is fundamental to this.”

The increase in student accommodation in Portsmouth, where there are about 21,500 students, is reflected across other University towns and cities in the south.

In Southampton, where there are around 30,000 students, the average weekly rent for a studio has increased by 50% since the academic year 2021/22 (£189 to £284 in 2024/25). For an ensuite room, the average weekly rent has increased by 40% (from £149 in 21/22 to £210 in 24/25).

In Brighton, students are now paying 21% more a week for a studio (£282 in 21/22 vs £341 in 24/25) and 24% more for an ensuite room (£230 in 21/22 vs £285 in 24/25) and in Winchester, the average weekly rent for an ensuite room has risen by as much as 24%, from £173 per week in 2021/22 to £215 this academic year.

In Bournemouth, students are now paying 27% more a week for a studio (£197 in 21/22 vs £250 in 24/25) and 25% more for an ensuite room (£158 in 21/22 vs £197 in 24/25).

Constrained supply and a fall in the delivery of student beds to the market have exacerbated rental growth. CBRE has predicted 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 annum for the next three years).

According to CBRE research, the sale of buy-to-let homes has contributed to an estimated loss of approximately 10% of the UK’s private rented stock since 2016, impacting the largest accommodation pool for students. Planning conditions, elevated construction costs, and the rising cost of debt have all influenced the supply pipeline and development viability in the sector and the shortfall in beds is increasing.

However, CBRE’s data shows there is still ample interest in the sector from institutional investors, which can be leveraged to increase the supply of beds. Just under £4 billion worth of investment deals took place in 2023 alone.

Tim Pankhurst, Head of Student Accommodation Valuation at CBRE, Pankhurst 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.”