Unite Group sees 7% rental growth and strong demand despite UK visa policy changes

Unite Group, the purpose built student accommodation provider, has reported that demand for its properties continues to grow, seemingly unaffected by recent changes in UK immigration policy.  

Unite’s chief executive, Joe Lister, expressed confidence in achieving near-full occupancy for the 2024-25 academic year, with an impressive 94% of rooms already reserved.  

Additionally, rental growth is expected to be at least 7%, up from the previous guidance of 6%. 

The company’s positive performance comes despite concerns that stricter immigration rules might deter international students.  

Unite reports that 18% of its portfolio has been taken by international students, only marginally down from 19% in the previous academic year.  

“We have not seen a meaningful impact from the removal of visas for family members of international postgraduate taught students, which reflects the single-occupancy nature of our properties,” the company explained. 

This stability in international student numbers might suggest that the UK’s higher education sector continues to hold strong appeal for students from abroad, despite political rhetoric that argues otherwise. 

Lister said: “Student demand remains strong from both domestic and international students, reflecting the continued appeal of UK Higher Education, our fixed-priced, all-inclusive offer and the growing shortage of high-quality student homes. 

“Together with our alignment to the UK’s strongest universities, this supports stronger rental growth for the 2024/25 academic year and underpins growth in our property valuations.” 

Unite Group has said strong rental growth helped drive up the value of its portfolio, with property values showing significant increases in the second quarter.  

The Unite UK Student Accommodation Fund saw a 3.2% rise to £2.93 billion as of June 30, while the London Student Accommodation Joint Venture experienced a 2.8% increase to £2.00 billion. 

These figures align with broader trends in the purpose-built student accommodation (PBSA) sector. 

Recent data from BNP Paribas revealed a staggering 245% year-on-year increase in investment in this sector, reaching £1.7 billion in the first half of the year.  

The sector’s success also highlights a pressing issue: the growing shortage of high-quality student homes.  

Savills estimates that almost 100,000 new beds are needed in London alone to meet demand. 

Looking ahead, Unite Group is optimistic about the potential support for universities under a future Labour government, based on recent statements from Labour Party leaders.  

The company noted that the Labour Party manifesto recognised the “soft power and economic value of UK higher education” and expressed an ambition to improve university access for a growing 18-year-old population. 

They added: “Encouragingly, there is also recognition that university funding arrangements are not meeting the needs of students and universities and the new government has committed to creating a secure future for UK higher education.” 

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