PBSA vs PRS: which is best for students as cost of living rises?
All-inclusive rents could drive demand for PBSA amid a spike in utility costs.
2 minutes to read
With rents on the rise, and further energy-cost inflation expected over the coming months, students returning to university or starting their studies this September are going to feel the pinch of the UK’s ongoing cost-of-living crisis.
Historically, there has been a perception that purpose-built student accommodation (PBSA) is the more expensive option relative to renting on the private market, but often PBSA rents include essentials such as utilities and Wi-Fi, as well as additional on-site amenities.
With this in mind, and with a sharp rise in bills and utilities expected over the coming 12 months, we have compared the difference in cost between an all-inclusive ensuite PBSA room and a room in a shared house within the wider private rented sector (PRS) marketed for students.
The findings shows that, when additional costs including energy bills, insurance and Wi-Fi are included, PBSA offers a more cost-effective option for students compared with the PRS. In fact, in 80% of the 16 university towns and cities analysed, the average all-in cost of PBSA was lower than the average for the wider rental market.
London offered the greatest difference in price. In the capital, students living in PBSA pay 33% less than the wider rental market once bills are included - offering a saving of approximately £108 per week, or £5,527 over a 51-week tenancy.
Other university cities including Liverpool, Sheffield, Glasgow and Leicester offered students savings of 25%, 15%, 14% and 11% respectively. The cost of PBSA in Bristol and Nottingham is 10% lower than the wider rental market, while Edinburgh, Exeter and Coventry all offer savings of around 8% on average. Students living in PBSA in Newcastle currently pay around 5% less than the wider rental market, while PBSA and PRS rent including bills in Birmingham was, on average, the same.
Student sentiment regarding the relative value for money offered by PBSA compared to the private rented sector has strengthened over recent years. The latest Knight Frank/UCAS UK Student Accommodation Survey which canvassed the views of more than 70,000 students, found value for money to be the single most important factor influencing the choice students make about where they live.
With PBSA in most markets offering significant savings, we expect to see more competition and demand for PBSA beds given the current economic climate.