UK Universities Capitalize on Student Accommodation Rentals Amid Funding Crisis
In the face of a mounting financial crisis, UK universities are increasingly turning to renting out student accommodation to non-students. This trend has reportedly generated nearly £100 million over the past three years, as institutions seek alternative revenue streams to offset financial pressures. Data obtained through Freedom of Information (FOI) requests reveals that some universities have seen their summer accommodation rental income double during this period.
Traditionally, universities have supplemented their income by renting out accommodation to non-students during breaks and hosting events such as conferences and summer schools. However, the recent FOI data suggests that many institutions are intensifying these efforts due to the current challenges facing the higher education sector.
Among the universities leading in private rental income from 2021/22 to 2023/24, University College London tops the list with an impressive £14 million. It is followed by Brunel University London, which earned £10 million, and the University of Nottingham, which generated £9.5 million. Notably, Queen Mary University in London reported a remarkable increase in revenue from £848,000 to £2.1 million, reflecting a substantial 151 percent rise. Similarly, Brunel saw its summer rental income soar from £2.1 million to £3.9 million, a 93 percent increase.
The Office for National Statistics has projected that 72 percent of universities will face deficits this year, attributing this to a combination of soaring inflation, stagnant tuition fees, and a decline in international student enrollments due to stricter visa regulations. Several prominent institutions, including Brunel University, have reported losses in their financial accounts for the 2023-24 period. Both Nottingham and University College London, recognized as leading Russell Group universities, are actively working to streamline their budgets and enhance their appeal to foreign students.
According to the FOI data, universities across the UK have collectively generated £98,825,919 from renting out student halls since the 2021/22 academic year, averaging approximately £2,102,679 per institution. Many universities are now promoting their accommodation options through online travel agents such as Booking.com and Expedia, as well as on their own websites.
Universities UK, representing 141 institutions, highlighted that a primary goal of renting out summer accommodation is to alleviate financial burdens on students who might otherwise incur unnecessary costs during term breaks. A spokesperson from the organization remarked, “Summer rental programs, including hosting conferences and summer schools, provide universities with a way to enhance efficiency and diversify their income streams during a period characterized by frozen tuition fees and high inflation.” They noted that these rentals occur primarily outside of term time, allowing for a mutually beneficial arrangement for both universities and students who remain in residence.
Brunel University London emphasized that hosting educational summer schools and conferences has always been part of their operational model. A university spokesperson stated, “The revenue generated from renting accommodation and facilities reflects our longstanding operational model. We always prioritize on-campus accommodation requests from Brunel students, and we do not mix our students with non-students in our summer programs.”
A spokesperson from University College London explained that the income generated during summer months is reinvested directly into the university, enhancing student facilities, educational support, and overall student experiences, as well as bolstering world-class research initiatives.
The research informing these findings was commissioned by Lavanda, a company specializing in private short-term rentals, which gathered data from 136 of the UK’s 166 universities. Fred Lerche-Lerchenborg, the CEO of Lavanda, remarked that summer rentals represent an effective strategy for universities to “drive efficiency and diversify their income streams” amid financial challenges. He noted that some institutions charge non-students rents that are 50 to 100 percent higher during the summer months, a strategy that not only attracts guests but also supports university budgets.
However, this increase in rental income comes at a time when students are grappling with rising costs. Recently, the Labour Party announced an increase in tuition fees to £9,535, with potential further increases on the horizon. Education Secretary Bridget Phillipson stated that the government must make difficult decisions to ensure universities are on a more stable financial footing.
Simultaneously, the cost of private accommodation in various university towns and cities in England has surpassed the maximum student loan available. Regions such as the South West and South East are particularly affected, where rental costs are projected to rise by nearly 10 percent in September, negating the 3.1 percent increase in the maintenance loan as outlined by the government.
The University of Nottingham did not provide a comment when approached for feedback regarding these developments.
