How Much Are International Students Spending on Accommodation in the UK?

International Student Spending Patterns by Location

Understanding regional spending variations is essential for strategic investment and development decisions. Our analysis reveals significant geographic disparities in accommodation costs:

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London Premium

London commands the highest accommodation prices nationwide, with international students typically spending:

• £1,000 to £1,500 monthly for shared student housing
• £1,500 to £2,000 monthly for private rooms
• An average of £1,350 per month according to National Union of Students data6

Regional Cities

Second-tier cities offer more moderate price points while still attracting substantial international student populations:

• Manchester and Birmingham: £600 to £1,200 monthly for shared accommodation
• Private studio apartments: £900 to £1,500 monthly
• 2-3% annual rent increases compared to London's 5%

Smaller University Towns

Smaller cities like Leicester, Sheffield, and Newcastle provide more affordable options:

• Shared housing: £400 to £800 monthly
• Significantly lower operating costs for providers
• Growing appeal as cost-conscious alternatives

Key Drivers of Cost for International Students

1. Location and Proximity to University

• City centre and campus-adjacent properties command the highest rents due to convenience and accessibility.
• Suburban and peripheral locations offer lower costs but may require longer commutes, a trade-off many students are willing to make for affordability.

2. Type of Accommodation

• PBSA: Favoured by 64% of international students for security, amenities, and community.
• University halls: Popular for first-year students, especially those seeking an all-inclusive package.
• Private rentals: Preferred by upper-year and postgraduate students seeking flexibility and independence.

3. Amenities and Services

• Properties offering en-suite bathrooms, high-speed Wi-Fi, gyms, and 24/7 security attract higher rents.
• The trend towards “hotel-style” student living is pushing up the average spend per student.

4. Lease Length and Flexibility

• Longer leases (12 months) can sometimes secure lower monthly rates, but many students prefer 9–10 month academic contracts for flexibility

Market Trends and Business Implications

1. Rising Rents and Inflation

• National average student rent: £660/month (2023, NUS survey).
• London rent inflation: 5% annual increase; Manchester and Birmingham: 2–3%.
• In 2024, average student rents rose by 8% due to acute supply shortages.

2. Occupancy and Demand

• Leading PBSA operators expect 97–98% occupancy for the 2025/26 academic year.
• The UK’s international student population continues to rise, despite recent visa policy changes, maintaining strong demand for quality accommodation.

3. Investment and Yield

• PBSA and student buy-to-let properties yield 6–8% annually, with some hotspots exceeding 10%.
• Institutional investment in PBSA reached £2.45 billion in H1 2024 alone.

4. Supply Constraints

• Only 23% of students can be housed in university accommodation, leaving the majority reliant on private sector options.
• The current PBSA pipeline is just under 200,000 beds, with 23% under construction, indicating persistent undersupply.

Opportunities for Property Managers

1. Developers & Investors

• Regional expansion: Secondary cities offer higher yields and lower entry costs than London.
• Product innovation: Demand is rising for en-suite rooms, studios, and flexible lease terms.
• Sustainability: Green buildings and energy-efficient designs are increasingly important for both students and institutional investors.

2. Universities

• Partnerships with PBSA providers: Joint ventures and nomination agreements can ensure adequate supply and quality standards.
• Data-driven planning: Leveraging occupancy and rent data to forecast demand and optimise on-campus versus off-campus provision.

3. Asset Managers & Operators

• Service differentiation: Enhanced amenities, community-building activities, and smart technology integration can justify premium pricing.
• Operational efficiency: Technology platforms for property management and tenant engagement are key to maintaining high occupancy and satisfaction rates.

4. Tech and Service Providers

• Smart building solutions: IoT, access control, and energy management are in demand.
• Digital platforms: Online booking, rent payment, and maintenance request systems streamline operations for both students and operators.

Case Study: Stoke-on-Trent’s Emerging Market

Stoke-on-Trent, home to Staffordshire University and Keele University, exemplifies the growing demand for quality student accommodation in secondary markets. The city’s affordable living costs and university expansion plans are attracting both students and B2B investors. Demand is shifting towards PBSA with modern amenities, creating opportunities for developers and operators to differentiate their offerings

Conclusion

The UK student accommodation market presents substantial opportunities for property managers despite current challenges. With projected growth to £12.62 billion by 2033, businesses that understand spending patterns, address supply shortages, and adapt to evolving student preferences will be well-positioned to capitalize on this dynamic market.

As international student numbers continue to recover and grow, strategic investments in purpose-built student accommodation-particularly in underserved markets-will likely yield strong returns. By focusing on collaborative approaches and addressing the balance between quality and affordability, property managers can develop sustainable business models in this resilient sector.