Only 15% of students can access purpose-built student accommodation, according to JLL research

London, 27 September 2023 – In Europe, private purpose-built student accommodation (PBSA) studios are on average 21% cheaper for students than renting studios in the Private Rental Sector (PRS). Global real estate consultant JLL’s analysis of 20 major European cities shows that when including utility costs, rents for private PBSA studios are more affordable than renting a PRS studio in almost every single market – even the least affordable rental cities in Europe.

Unmet demand for student beds surpasses 150,000 in both London and Paris. In smaller markets, such as Berlin and Brussels, unmet demand can be as high as 50% of the student population, according to JLL.

The top markets where students can save money by living in PBSA include Amsterdam (-46%), Rome (-40%) and London (-37%). Just two cities were found to have higher costs in PBSA, Toulouse (+5%) and Milan (+3%).

The lack of PBSA supply across Europe has forced many into the private rental market, exacerbating the overall housing problem. In fact, students in UK cities Exeter and Nottingham, make up 40% of all PRS households.

JLL recently reported that European PRS listings were down 14% after the summer period. In cities with high numbers of students, the fall in available rental homes were even more pronounced: -61% in Utrecht, -58% in Stuttgart, -40% in Brussels, -38% in Lyon and -28% in both Manchester and Birmingham.

Dominika Mocova, Senior Analyst for EMEA Living at JLL, said: “The long-term investment case for PBSA is more solid than ever. Developing more PBSA across the continent would be a game changer for students who cannot find appropriate housing. It’s also essential to universities, whose reputations can suffer when they are unable to provide appropriate housing. Finally, those additional homes would also help ease pressure on the PRS market.”

The stark difference between private PBSA and PRS costs results from broader housing affordability challenges across the continent. Indeed, JLL’s European Rental Index tracked a 10% climb in private rents in Q2 2023, as the cost of renting relative to average disposable income surpassed the affordability threshold of 30% in most European cities. This news comes following Scotland’s 2022 Student Union research, which found that some 12% of UK students had been homeless at some point since the beginning of their studies.

Julia Martin, Head of Student Housing EMEA at JLL, commented: “From established capital cities to smaller, tertiary education focused cities, the PBSA sector has real potential to help plug the gaps in the European student housing market. High financing and construction costs have limited new development more recently, leading to a significant pent-up demand from students who are being forced into the private rental sector. As investors gain clarity on pricing, there is a big opportunity to tackle this challenge across the continent.”