\u201cIt was dead in the middle of summer, it was a shock,\u201d says Nathalie Sriwiboonrattan. The fourth-year game design student at Abertay University was at home with her family thousands of miles away in Thailand when she discovered the owner of her Scottish studio flat had abruptly gone bust.<\/p>\n
\u201cI was like, my hands are tied. I\u2019m not in the country. I don\u2019t know what to do,\u201d she says. Sriwiboonrattan was forced to act quickly to secure new housing for the academic year, which has just begun, paying \u00a3850 to have her possessions moved.<\/p>\n
Her sudden upheaval was emblematic of the wider crisis in student housing. While UK universities face a financial crisis<\/a>, providers of accommodation are grappling with falling international student numbers<\/a>, a cost of living squeeze and higher borrowing and build costs, exacerbated by the Iran war, affecting upgrades at older properties.<\/p>\n A string of tower blocks known as purpose-built student accommodation (PBSA), targeted at more affluent students, have run into financial difficulty.<\/p>\n It had been touted as the ultimate student living: smart city centre blocks with gyms, cinemas and rooftop terraces have sprung up across the UK. A world away from the traditional image of dirty and dingy shared digs<\/a>, the flats have offered a spacious alternative for their relatively affluent residents \u2013 often international students. Now, some sit half empty, and several schemes have gone bust<\/a>.<\/p>\n Sriwiboonrattan was among nearly 70 students in Dundee who were left scrambling to find accommodation<\/a> in late July after the collapse of the owner of Marketgait Apartments, a 116-room city centre block that had a concierge and a shared games lounge with a pool table.<\/p>\n Despite the boom in housing developed by financial institutions in recent years, many students heading off to university this term faced a different dilemma. Rents at the tower blocks have grown much faster than maintenance loans for British students, leaving PSBAs financially out of reach.<\/p>\n Meanwhile, the cost of living crisis has put financial pressure on students<\/a> seeking university-owned or managed accommodation, while rising rents have hit those wanting to live in shared private rentals. Underlining the scale of the shortage of affordable housing, the students\u2019 union in Bristol included an emergency support number for the housing charity Shelter in an email to new students.<\/p>\n At PSBAs, the national average rent, excluding London, is \u00a3191 a week including bills, according to the website StuRents.<\/p>\n At the top end, en suite rooms in Manchester command a weekly rent of \u00a3170 to \u00a3320<\/a>, whereas in London, en suite rooms are \u00a3250 to \u00a3650 a week<\/a>, and studio apartments in Bloomsbury cost between \u00a3550 and \u00a3800 plus.<\/p>\n \u201cI wasn\u2019t able to get into PBSA because it is very expensive in Birmingham,\u201d says Soham Chougale, 23, a student at University College Birmingham. \u201cI am an international student, so my working hours are capped at 20 hours [a week in term time], which means I can\u2019t afford to live in PBSA,\u201d says Chougale, the education officer at UCB Guild of Students<\/a>.<\/p>\n He lived in university-owned dorms for the first two years of his aviation management degree and now shares a two-bedroom privately rented flat with a friend. On campus, he paid \u00a3660 rent including bills a month during the first year, which rose by 10% in his second year; now he pays \u00a3700 rent a month, excluding bills.<\/p>\n Soham Chougale \u2018wasn\u2019t able to get into PBSA because it is very expensive in Birmingham\u2019.<\/p>\n While living on campus \u201cgave me the best feeling of community\u201d and \u201cI still have those friends that I met on the first day\u201d, the wifi was patchy, some facilities were broken and there was a mouse infestation, he recounts.<\/p>\n \u201cPBSA can be quite pricey,\u201d says Matthew Pointon, a real estate analyst at Capital Economics, but adds: \u201cNormally professionally managed buildings are better in terms of quality.\u201d<\/p>\n In London, which attracts the richest students, there is still demand for upmarket accommodation, but outside the capital, there is an oversupply in some cities, such as Coventry, Leeds and Nottingham.<\/p>\n This week, university staff began strikes in Dundee, Edinburgh and Nottingham<\/a> over budget cuts, with the industrial action threatening to wipe out a term of teaching for many students.<\/p>\n In Nottingham, demand has fallen from a pandemic peak of 46,295 beds in 2022-23 to 42,290 beds in 2025-26, while 7,700 more PSBA beds came on to the market, the student housing charity Unipol calculated.<\/p>\n The number of students arriving from China has stagnated, and those from the new growth countries India, Pakistan and Nigeria are much more cost-conscious than the pre-Covid students from China<\/a>, says Martin Blakey, an adviser on student living and the former chief executive of Unipol.<\/p>\n Deniz Yal\u00e7\u0131n, the chair of the Newington-Meadows branch of the Living Rent union in Edinburgh, says: \u201cIn Edinburgh, we\u2019re seeing an explosion of PBSA despite the fact that this type of development is not needed and actually fuels the housing affordability crisis here.<\/p>\n \u201cMany of them lie empty during most of the year, using the Fringe [festival]<\/a> to bolster profits. Some have even been bought by the council to become temporary housing.\u201d<\/p>\n graph showing rise in loan balances 2021-2026<\/a><\/p>\n Richard Ward, the head of research at StuRents, says the key issue is the big gap between maintenance loans and rents, after double-digit rental growth at PBSA blocks and shared houses in recent years.<\/p>\n Maintenance loans have declined in real terms<\/a> because of below-inflation increases and frozen parental income thresholds. \u201cAnd what have we seen? More students commuting<\/a>,\u201d Ward says. \u201cOutside of London, you\u2019re talking about \u00a3300 rent a week to make a new PBSA scheme viable. Well, your average British student is paying about \u00a3160 a week.\u201d<\/p>\n Occupancy rates at the tower blocks range between 71.3% in Glasgow, 69.9% in Coventry, 89.7% in Bristol and 95.3% in Exeter, as of August, according to StuRents.<\/p>\n Student housing providers are increasingly focusing on the cities with the best universities. Unite Group, the UK\u2019s largest developer and manager of student accommodation, has stepped up sales of unwanted sites.<\/p>\n The loss-making group aims to slim down its portfolio to 55,000-60,000 beds in 20 cities compared with 72,000 beds in 29 cities at present, \u201cto increase alignment to the UK\u2019s strongest universities, where student demand is robust and growing\u201d. Unite reduced rents and tenancy lengths<\/a> in Nottingham, Leicester and Sheffield, the \u201cmost challenging\u201d cities, earlier this year, and rooms start from \u00a399 a week in Coventry.<\/p>\n About 95% of new student beds are being built in cities with Russell Group universities, up from 81% last year, according to the property agency Knight Frank, by investors such as Blackstone, KKR and Greystar. The Russell Group is an association of 24 established UK universities including Cambridge, Oxford, Durham, Edinburgh, Manchester and King\u2019s College London.<\/p>\n Smaller PBSA operators are struggling, with average occupancy levels of 85% across the sector, Unipol estimates. The housing association Sanctuary has been trying to sell student assets of more than 5,600 beds, across 21 properties in eight locations across the UK, for nearly two years, and in July said the buyer had \u201csought to revisit pricing assumptions\u201d citing changes in economic and market conditions.<\/p>\n Investors poured \u00a3164m into the PBSA sector between April and June, one of the lowest quarterly levels on record, although total investment of \u00a32.3bn in the first half was ahead of 2025, according to Knight Frank research. Only 13 deals were completed during the second quarter.<\/p>\n In response to the sector\u2019s headwinds, several PBSA owners plan to rent some floors to young professionals, while one block in Leeds that is only 50% full could partly be used for short-term hotel stays<\/a>.<\/p>\n In Dundee, Sriwiboonrattan has found alternative accommodation \u2013 a studio in the nearby Parklands block \u2013 which has a sky lounge with city views, gym and rooftop terrace \u2013 where she is paying weekly rent of \u00a3240, with financial support from her family. At Marketgait, she says the \u201cwalls were thin\u201d with noise coming in from neighbours and lifts unreliable, so she prefers her new surroundings now the initial shock has dissipated.<\/p>\n