Increased student numbers are worsening the housing crisis

Since George Osborne announced the deregulation policy on higher education last autumn, UK universities have entered into an arms race. The competition between institutions has risen, and there are concerns that a clear division will be created between universities that will thrive and those that won't. Furthermore, while the reform will have a profound impact on the institutions themselves, it will also significantly affect the housing market, which many believe has been overlooked.

An extra 30,000 places have been opened for higher education this year, adding to the estimated 2.5m current students. With an increasing student population, private companies have begun to invest in this emerging student market, and have bought properties specifically for them. Real estate service provider Savills forecasts that £2.5bn of investment in 2014 will be directed at student housing schemes, a figure that is considerably more than the Homes and Communities Agency would invest in affordable family housing. Arguments have been posed that while business appears to be booming, pumping money into student housing is unsustainable, unaffordable and detrimental to the UK's mainstream housing market. Cambridge, for example, attracts wealthy international students from all over the world, and reports indicate that since 2006, 4,501 student bedrooms have been created with a further 2,335 are in the pipeline with planning permission confirmed. These figures interestingly compare to the 2,480 homes that were built for family orientated communities. For a sustainable housing market, many are arguing for the new developments to be adaptable so its uses are longstanding. These concerns have been supported by developers who state that if the student market were to collapse, these development schemes would need to be demolished and new money invested to rebuild.

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