Britain’s largest student accommodation provider is facing challenges in filling its university halls of residence as more students opt to stay at home to save money. The Unite Group is experiencing a decrease in demand from international students and domestic students who are wary of accumulating significant debts.
The company reported that 86% of its student accommodation beds have been reserved for the upcoming academic year starting in September, although this is after implementing price reductions. While the reservation rate is slightly higher compared to the previous year at 85%, it is notably lower than the 94% reservation rate prior to the 2024/25 academic year.
The impact of the Covid-19 pandemic has significantly affected Unite Group, with its halls of residence previously operating at over 97% capacity. Consequently, the company’s share price has declined by more than half since 2022 and dropped by an additional 2% following the latest update.
To counter these challenges, Unite Group has decided to sell off halls in less popular universities and focus on prominent educational institutions. It aims to sell properties worth between £300 million and £400 million this year.
Joe Lister, the CEO of Unite Group, expressed optimism about the upcoming academic year, noting a positive trend in reservations for 2026/27 driven by strategic marketing efforts and pricing adjustments. He highlighted the financial strain on students and families due to inadequate adjustments in student loans to inflation.
Unite Group operates 208 properties across 29 cities, providing a total of 72,000 beds. Its portfolio includes Unite Students, catering primarily to first-year students, and Hello Students, targeting students in later academic years.
Despite the current challenges, Unite Group anticipates its accommodations to be occupied at 94% to 96% capacity in the next academic year, with rental income projected to grow by 1% to 2%. The company has revised the estimated value of its properties, reporting a 2.2% decrease in the Unite UK Student Accommodation Fund’s value to approximately £3 billion.
Max Harper, a senior analyst at Third Bridge, highlighted ongoing market difficulties, citing increased rates of students living at home and declining demand for lower-tier universities amid questioning the cost-benefit analysis of obtaining a degree.
