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Demand Unphased by Covid-19

Posted by Richard Ward

Demand Unphased by Covid-19

On March 23rd in a televised address, Prime Minister Boris Johnson urged the UK public to stay at home. Some 100 days later, restrictions are starting to ease, however, as Leicester has witnessed, the road to normality is likely to be a long and winding one.

With the risk of contracting the disease still at the forefront of most people's minds, including students, one may have expected self-contained studio units to have increased in popularity in recent months.

However, the latest enquiry data from StuRents suggests this trend has not played out as expected. Between the period of Mar-Jun (2020), the distribution of enquiries by bed size has been largely in line with last year. For example, the size with the largest proportion of enquiries was 4 beds, taking 18% of the total, albeit this was down from 21% recorded in the previous year.

Combined, clusters and houses in multiple occupation (HMOs) containing 3 beds or more captured 58% of enquiries made in the four months. Whilst combined, studios and 1-beds equated to 24% of enquiries made, this compares to 25% recorded in the equivalent period of 2019.

The data therefore seems to dispel this hypothesis.

With social distancing measures restricting movements and interactions between households, perhaps the appeal of living in an isolated bubble of friends means larger sizes remain an attractive proposition. Furthermore, for most students, affordability is still a key consideration and one that may make studios an unviable option due to the higher price that they command. For example, nationally, outside of London, the average studio room in purpose-built student accommodation (PBSA) carries a per person per week (pppw) rental premium of 77% compared to the average HMO.

Figure 1: Enquiry distribution by bed size (Mar-Jun)
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Whilst year-on-year demand for larger clusters has been surprisingly buoyant, it needs to be considered within the wider seasonality of the market. This is particularly the case for those operators of PBSA that may be looking to target a greater proportion of domestic students, due to the risks associated with declining international numbers.

StuRents' data for the last full lettings cycle (Oct-Sep) highlights the distribution of all enquiries for clusters and HMOs consisting of at least 3 beds. The data indicates that by the end of March c.75% of enquiries for this size had already occurred. By the end of June, this figure increased to 85%.

Figure 2: Enquiry distribution (3+ beds)
Market seasonality max-width:100 height=

Therefore, those PBSA operators looking to attract students away from HMOs, must be aware that the demand pool will have diminished considerably by the time the country had entered lockdown.

However, the national trend hides significant local variations. In the most extreme example, in Durham by the end of March 90% of enquiries for 3 beds or more had been made.

Localised data such as market seasonality and average pricing for HMOs and PBSA can be used as part of a marketers decision-making process, and in times of uncertainty, this could help provide an edge that allows an operator to be more cost-efficient.

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About StuRents:

- StuRents is one of the leading proptech partners in the UK student accommodation space

- StuRents operates, the largest student-centric accommodation search platform, listing over 750,000 bed spaces nationwide

- Beyond search, StuRents facilitates integrated online tenancy signing, tenancy payments and app-based tenancy management solutions

- This unique, vertically integrated end-to-end solution underpins StuRents' data insights and research capabilities