SUMMARY OF REPORT CONTENTS
Student Bed-spaces by
Ownership Type - 2010(%)
The continued expansion in the number of students in
higher education has led to increased pressure on university
residential accommodation. Decent accommodation is a key part in
universities’ marketing strategy to attract new students, but only
around 21% of students are currently catered for in university run
halls. With student numbers forecast to rise to 1.5 million by the
end of 2010 the shortfall in university owned accommodation will
continue to grow, requiring universities to address past under
investment and develop additional student residences to cope with
the growing numbers in communal accommodation.
It is
estimated that there are around 469,000 student bed-spaces in halls
of residences across the UK, of which 326,000 are provided by the
Higher Education sector directly and the remaining 143,000
bed-spaces by private providers.
The total
UK university estate is large and diverse, totaling 25 million sq.
m. of space, of which around 6.2m sq. m is residential space. The
total value of the UK student accommodation sector is estimated to
be around £20bn, of which University owned student accommodation is
worth around £13.8 billion and purpose built privately-owned student
accommodation is worth around £6.2 billion.
There is
thought to be a remedial investment need of approximately £5.1bn
across the whole UK higher education infrastructure, to address
backlogs of maintenance, of which around £1.3bn is for residences.
With around 70% of the university estate consisting of buildings
that are 30 years old or more, the replacement cost of buildings in
English universities alone is estimated to be £11bn.
Universities will face considerable funding challenges over the next
decade as public spending cuts become unavoidable. HEFCE funding has
already been cut by £915 million to 2012-13 and universities are
anticipating much fiercer competition for lucrative international
students, while the expansion of domestic student numbers has been
cut sharply by the Government.
HEFCE is
distributing around £7,356 million to universities and higher
education colleges for the academic year 2010-11. This is a
reduction in cash terms of £573 million compared to 2009-10. The
capital budget at £562m represents a 14.9% reduction in cash terms
after adjusting for the £250 million of capital funding that was
brought forward from 2010-11 into 2008-09 and 2009-10.
Following
the formation of a Conservative-Liberal Democrat coalition
government after the General Election on May 6th 2010, the higher
education sector and wider construction industry is now awaiting
clarity on where public sector spending cuts may fall and the
establishment of clear economic policy for the long-term. For the
higher education sector, already facing cuts of around £900m over
the next three years, there are fears that extra cuts could be
announced as part of the emergency measures, though this appears to
have been restricted to fewer new places in 2010.
Given the
extreme uncertainty in the economy at the present time, a number of
commercial operators are not committing to any new development
projects until financial markets stabilize, instead focusing on
generating and conserving funds to enable development to take place
once the economy recovers. Forecasts are therefore that growth of
commercially built student accommodation will be relatively flat in
2010 before development picks up in 2011.
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