Students and parents pay £1bn on unused university housing

Almost £1bn has been ploughed into rent on unused university accommodation this academic year, according to a nationwide survey which will reinforce concerns about students and their parents wasting money on housing in the pandemic.

Half of students polled by finance website SaveTheStudent said they struggled with rent. The survey, which covered 1,355 university students in late January, also found that stress affected the health of two out of three students and the studies of half.

“Many students have been left without a leg to stand on,” said SaveTheStudent’s money expert Jake Butler.

Students have faced increased financial strains during the Covid-19 pandemic as many no longer rely on part-time employment or parental support. Some have to cope with increased costs linked to online learning, while others find government support does not meet dropping incomes.

After an initial wave of rent strikes around the country, most universities have afforded some form of rent rebate and breakout clauses on university-provided accommodation.

The representative organisation Universities UK said universities are actively working with government and looking at ways to ensure a fair deal for students.

But about half of students reside with private landlords and are struggling to leave their contracts early or access rebates. Two large private student accommodation providers — Unite and Union Roost — have offered rent refunds to tens of thousands of students this year. But, overall, only 6 per cent of students said they were able to get a rent refund on unused accommodation from private landlords, according to the survey.

A number of students moved back home with their families over Christmas and stayed there this year but still pay for accommodation.

“Students have frankly had a rotten deal during the pandemic,” said personal finance expert Iona Bain. “This research highlights a callous, petty and exploitative attitude when it comes to housing within too many universities and private accommodation providers.”

Most private rental contracts do not have specific clauses for students, according to research by UK think-tank Higher Education Policy Institute. Students are also less likely to ask for rebates from private landlords than from universities, according to the survey.

Rent is a primary concern for students, according to Bain, with anger mounting against universities who, for the most part, encouraged students to take up accommodation this academic year, despite face-to-face teaching being sparse. 

Students tend to rely on their parents for financial support as government loans typically fall short of living expenses and rent, according to Bain.

Parents on average contribute £2,288 a year towards rent for their children, according to the survey, although fewer students say they have asked their parents for money this year as family incomes were hit by the pandemic.

This month, £50m was granted by the UK government in hardship funding to universities. Some of those funds have been used to alleviate rent.

The National Union of Students has asked the government to underwrite rent for housing students who cannot access or afford it, adding that the hardship funds should be in the £700m range.

“Westminster must redress extortionate housing costs, and move towards fully-funded education so students are never pushed into these kinds of dire financial situations,” said NUS national president Larissa Kennedy.

The Department for Education said: “This has been a very difficult time for students, which is why we recently distributed up to £70m to help students most in need this financial year . . . in addition to an existing £256m available to universities. We will keep this support under review.”