‘Little prospect’ of new student housing in many markets due to viability constraints, warns Unite

Unite Students has warned delivery of purpose-built student accommodation (PBSA) is becoming unviable in many parts of the country due to rising construction and regulatory costs.

The developer, in its results for the year to 31 December, pointed to figures showing PBSA delivery is down 50% on pre-pandemic levels at around 17,000. It said this reflected “viability challenges created by higher costs of construction and funding, as well as the time required to secure planning and Building Safety Regulator (BSR) approvals.”

It said: “Weekly rents now need to be at least £230 for new PBSA development outside of London to be viable, meaning there is little prospect of new PBSA supply in many markets.”

The accounts included a £10m write off of planning costs after Unite decided not to proceed with a 600-bed scheme in Paddington it had been planning to develop with Travis Perkins due to viability concerns.

Unite increased its overall turnover from £299.3m to £332.8m and its adjusted earnings from £213.8m to £232.3m. Its rental growth for the year was 4% and its occupancy rate 95.2%, this compares to 8.2% and £97.5m for the previous year. Statutory profit fell from £444m to £97.7m due to property valuation changes.