Rising student accommodation costs in Scotland spark concerns over affordability

New data reveals a growing disparity in student accommodation costs across Scotland’s major university cities, raising concerns about affordability and potential impacts on student choices. 

According to research by real estate advisor CBRE, students in Glasgow could pay nearly £5,000 more for accommodation than their counterparts in Aberdeen in the upcoming academic year.  

The analysis of the Purpose-Built Student Accommodation (PBSA) sector in 30 major UK university towns shows significant rent increases in Scotland’s two largest cities for 2024/2025.  

Glasgow students face an 18% increase for ensuite rooms, with weekly rents rising from £200 to £235.  

This translates to an annual cost of £11,985 for a 51-week rental, potentially exceeding the maximum loan and bursary package available in Scotland, set to increase to £11,400.  

Edinburgh is also experiencing substantial increases, with ensuite room rents expected to rise 8% to £214 per week.  

In contrast, Aberdeen’s average rent for a shared flat remains stable at £138 per week, totalling £7,038 annually. Dundee bucks the trend with an 8% decrease in ensuite room costs. 

CBRE has predicted that by 2028, the market could face a potential shortfall of 620,000 student beds relative to the 36,000 currently identified as being delivered in that period. 

Chris Dougray, executive director of CBRE in Scotland, said:  

“There is a notable difference between how much it costs for a student to live in Aberdeen and Dundee, compared to Glasgow and Edinburgh and that will undoubtedly have to be factored in when school leavers and mature learners are considering where to study.” 

“The upcoming spike in accommodation costs, particularly in Glasgow, is concerning and the shortage of available PBSA in the city means higher rents are inevitable because there are so few vacancies. 

“It’s estimated that there is a shortfall of 22,000 student beds in Scotland’s largest city alone. Although there are plans for a number of new developments in the pipeline, for example at Collegelands near Strathclyde University, there is a long way to go before demand is met. 

“With the rent rises for the next academic year coming, some students may have to move out of accommodation mid-degree and move back home if they can as they can’t make ends meet even with part-time jobs to pay for the other essentials such as food, travel and clothing.” 

The rising costs are not unique to Scotland. 

Tim Pankhurst, head of student accommodation valuation at CBRE, suggested that affordability issues could lead to an economic migration of university undergraduates in the UK. 

“As maintenance loan growth lags and the cost of attending university grows, we could see a shift in where they choose to go.” 

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

Several factors contribute to the current situation.  

The sale of buy-to-let homes has reduced the private rented stock by approximately 10% since 2016. 

Additionally, the delivery of new PBSA bedspaces has slowed significantly, with only 9,000 added last year compared to a historical average of 30,000 per year.  

Despite these challenges, there is potential for improvement.  

CBRE’s data shows continued interest from institutional investors, with nearly £4 billion worth of investment deals in 2023.  

Oli Buckland, head of PBSA investment at CBRE, expressed optimism:  

“With conditions predicted to become more viable in 2024 and the current scarcity of quality-built stock, institutional investors will return to forward fund new developments.” 

As universities increasingly look to the private sector for PBSA development, leveraging this investment could help address the chronic shortage of student accommodation.  

However, the immediate concern remains the affordability crisis facing students in the coming academic year, particularly in cities like Glasgow and Edinburgh.  

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