6 Reasons To Increase Your Rental & Overall Budget for Academic Year 2024

As the new academic year draws closer, students are eager to begin a new chapter with an updated curriculum, including unique accommodations and new opportunities. When it comes to booking accommodation, the average student budget for the academic year will also see an increase because of global inflation. The sudden rent increase is causing confusion and concern among students. Let’s find out why student budgets should be increased this academic year.‍

1. The rise in university tuition fees:

Due to the increasing demand for international education and also because of inflation, the universities increased their tuition fees as compared to the previous years:

• United States: The average cost of tuition and fees at four-year public colleges and universities increased by 2.4% for the 2021-2022 academic year.
• United Kingdom: The government has announced plans to increase tuition fees in England by 3.6% for the 2021-2022 academic year, which has been frozen at $11484.8 per year since 2018.
• Australia: The Australian government recently announced plans to increase tuition fees for some university courses, including humanities and social sciences, by up to 1.13% starting in 2022.

2. Inflation strikes the global economy

Inflation is one of the primary reasons affecting the rent rates, and makes budgeting for uni difficult. The global economies are operating in an inflated economy, making it very difficult for the market to operate at the same pricing rates it did previously. This results in higher prices for both consumer and capital goods. According to the IMF inflation report, global economies had an average inflation rate of 8.8 in 2022, compared with 14% for advanced economies, the International Monetary Fund (IMF), which still prevails in the financial year of 2023. So, you must plan out your student budget according to the current inflated economy.

3. Growth in Student Accommodation cost:

In recent years, international education applications have increased, causing the industry to run short on supply due to increasing demand. There has been a spike in the price of student housing, leading to a cost of living crisis that might increase dropout rates. The overall impact on the average student budget has been such that recent reports predict 1 out of 5 UK students are considering dropping out.

• United Kingdom: In 2023, private student accommodation has seen an average rent increase of 14.5% across all Russell Group cities in the past four years.
• United States of America: According to the College Board report, the average cost of room and board for students living on campus at private nonprofit four-year institutions increased by 6% for the 2022-2023 academic year.
• Australia: In 2023, accommodation prices have increased by 8% as compared to the rates of the last academic year.

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4. Increased student application and demand:

The number of applications for international students has increased drastically, which has an indirect impact on student budgeting. Dynamic global market, education, and upskilling have become increasingly important in recent years as a way to secure a brighter future in academics for students. With large numbers of incoming international students, the competition has made it tricky for student budgets to match up to the overall cost of living.

• United Kingdom: It is estimated that the number of applications for UK universities in the 2022-23 cycle increased by 0.2%.
• United States of America: A study by amber Student Housing Report found that undergraduate enrollment in the USA increased by 3.63% in 2022-23.
• Australia: Compared to the previous year, international student enrollments in higher education institutions in Australia increased by 5.20% in the year 2022-23. In previous years. In the current academic year, the ratio of beds to applicants rises from 7:1 as compared to the previous years, which used to be 3:1 as per the latest JLL PBSA report.

5. Russia-Ukraine War

The Russia-Ukraine war has created a gap in the supply chain, which resulted in the slow movement of the construction industry. This has further created a supply deficit with skyrocketing demand. The supply chain in the student housing industry has been affected massively as this industry is a capital-intensive industry. Also, massive uptakes from students have been observed in the war-affected zones, who are now applying to international universities in search of safer grounds. However, the unstable environment, surge in intake numbers, and limited housing has made student budgeting much more complicated.

6. High gas and oil prices since 2022

The number of applications for international students has increased drastically, which has an indirect impact on student budgeting. Dynamic global market, education, and upskilling have become increasingly important in recent years as a way to secure a brighter future in academics for students. With large numbers of incoming international students, the competition has made it tricky for student budgets to match up to the overall cost of living. In many cases, students rely on education loan providers to help cover these expenses, adding another layer of complexity to their financial planning.

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7. High utility bills for the housing industry

Prices of utilities, such as energy, water, and electricity, have been increasing drastically over the years, due to which the rent rates are rising.

• United Kingdom: During the past few years, utility prices have increased in the UK, with a typical household's dual-fuel energy bill. As of 2022, the average water and sewerage bill was $510, which is an increase of 92% from the previous year.
• United States of America: According to Move.org, the average US utility bill is $398 per month, but it can vary greatly by region and state.
• Australia: Similarly, according to data released by the Australian Energy Market Commission, utility costs in Australia have been rising over the past few years Australian Energy Market Commission.

As the rent rates are rapidly increasing in light of all the political, economic, and demographic reasons, there is a lesser chance of the rates decreasing anytime soon. This trend has an undeniable and widespread impact on student budgeting, especially for students studying and living abroad. Recently, Norwegian universities have made tuition fees compulsory for international students in order to cover their education costs, which were otherwise covered by government subsidies. Thus, it’s essential to increase student budgets for accommodation for the current academic year. Although venturing into new lands might be challenging, you can always rely amberstudent.com on to secure your dream accommodation & getting home well within your budget!