Students in London are paying well above the maximum level their loans can stretch to, after prices jumped 20 per cent in just one year.
Those renting privately in purpose-built student accommodation (PBSA) can expect to pay around £19,706 to live in the capital for the 2023-24 academic year, according to PwC analysis of StudentCrowd data.
The amount is one and a half times the maximum maintenance loan available for students from England living away from home in London, which is currently £13,022.
Studying in London has come with a significant hike in rental costs over the past year, PwC found, with the average price jumping 20 per cent to £395 per week between May 2022 and May 2023.
The maintenance loan is intended to help those in education with their living costs. But rents are outstripping the maximum the Government-backed scheme can lend to students, even outside of London.
The average annual rent for private student accommodation outside of the capital for the coming academic year is £10,227, compared to a maintenance loan limit of £9,978.
“It’s not really a stress you need when you’re trying to be a student,” says Jimmy Demetriades, 19, who will be moving to London from Littlehampton to study music at King’s College in September.
Demetriades has been allocated a maintenance loan of £6,400 for his first year – £2,100 less than the cheapest accommodation offered at King’s, for which he was quoted £8,500 for nine months. On King’s College’s website, the most expensive rooms are £465 per week (£18,600 for nine months).
“Bills are included, but it’s one room,” explains Demetriades. “You’re going to have to somehow make up that money.”
Demetriades registered his interest for accommodation, but by the time King’s College responded two weeks later, there were no rooms left – leaving him to navigate London’s competitive rental market alone.
“You’re just kind of stranded…It’s even more of a problem in London because the housing market is so competitive and deposits are ridiculous, which is hard for an 18 or 19-year-old to come up with.”
Demetriades started his search for a property in June, attending viewings with up to 15 other people. He was budgeting £1,000 per month on rent.
As well as large deposits, many of the places he contacted wanted him to move in in August, which would mean paying for an extra month’s accommodation. “One viewing I went to was £750 in Shepherd’s Bush. All bills were included, but it was a tiny room – really not a lot for the money.”
Fortunately, Demetriades was able to find a “miracle” one-bedroom apartment in Acton for £600 per month, belonging to someone he knew. Although the find —and price — was a “godsend”, his maintenance loan is still not enough to cover a year’s rent.
Demetriades is already working part-time in a supermarket, but he has calculated that he will need to work 20 hours a week while studying to cover the rest of his rent and expenses. Understandably, he is concerned that this will compromise the studies and experience he is paying £27,000 for.
“It’s going to make it a lot more stressful than it could be,” he says. “[Money] is a concern. London’s expensive…It’s just a fear and insecurity of not knowing if you’ve got a place to live – and not knowing if you’ve got enough to live off.”
Glasgow and Manchester both saw similar rent increases to London, up 19 per cent and 21 per cent respectively.
“It’s clear the challenges felt by students and universities across the UK are more pronounced in London, where the rental pressures are likely to be felt to a greater extent,” said Karen Best, head of education lead advisory at PwC.
“There are no easy or fast fixes that do not come with considerable compromises, whether financial or that adversely impact student experience. However, from what we see there is widespread motivation across all market participants to relieve these pressures.”
