Octopus Group Reading time: 7 mins

Can we give students a better way to live, work and play?

5 Jul 2019

Gavin Eustace, Head of Residential Development at Octopus Real Estate, reveals the findings of the Student Accommodation Impact Report, which looks at some of the reasons why purpose built student accommodation has a significant role to play in the success and wellbeing of students.

The UK is still one of the most popular places in the world to study and gain professional qualifications. In September, it’s expected that record numbers of British students will be heading off to universities across the UK to begin their full-time education. According to the Universities and Colleges Admissions Service (UCAS), in 2018, a record 27.9% of the 18-year-old population in England gained a university place, and a total of 411,860 people gained a place on an undergraduate course.

The UK also remains one of the most popular study destinations worldwide. In 2018, UCAS says that more than 26,000 students from the European Union (EU) were accepted to study in the UK, alongside a record 31,510 students from outside the EU. As of 2017/18, according to official international enrolment statistics, 458,490 international students were attending university in the UK.

The demand for more student accommodation

As you might expect, there’s an overwhelming demand for student accommodation throughout the UK. Data from estate agent Knight Frank suggests full-time student numbers outweigh current available accommodation ‘bed spaces’ by three to one. Students usually have the option of choosing between halls of residence, privately renting a shared house or flat, or living in purpose built student accommodation.

What is ‘purpose built student accommodation’?

Purpose built student accommodation is housing built specifically for students by private developers. Such accommodation usually involves properties with many rooms plus a shared kitchen and living area. But modern purpose built student accommodation often has additional leisure facilities, study areas, or even added bonuses such as a gym, games room and cinema.

Universities currently own 69% of existing purpose built student accommodation, but the private sector – and companies like Octopus Real Estate – are increasingly being called on to help bridge the gap between demand and supply.

We asked more than 1,000 students to tell us what’s most important to them about purpose-built student accommodation. The results form part of our Student Accommodation Impact Report, which is available to download here.

The key findings from our report, highlighted below, reveal just how important purpose built student accommodation is to students, influencing their academic results and entire university experience. In turn, our report demonstrates the opportunity for developers who can meet students’ requirements.

Key finding: Better accommodation makes for higher grades

The majority of students are aware of the importance of high-quality accommodation in creating the right environment for studying and achieving their goals. Students want a homely environment and communal areas to socialise in, including a quiet study area.

Our survey reveals that those who lived in higher quality, purpose built accommodation are more likely to report top grades. In fact, those living in purpose built student accommodation are 26% more likely to report top grades in their first year of university, compared against students living in halls of residence. This trend continues as students progress through each year of university. Similarly, many post-graduates feel they should have chosen different accommodation for better results.

Key finding: Better accommodation is better for student wellbeing

Research suggests that for university students, being actively engaged with their academic studies has a massive impact on mental health. And the connection between academic success and living environments is recognised as being increasingly important.

Realising this, universities and accommodation providers are now working more closely together to build accommodation that not only meets the demand of an increased number of students, but also is shown to demonstrably to boost wellbeing, encourages positive social interactions and contributes significantly to a student’s overall university experience.

Our survey findings revealed that from their first to third year, students are more likely to be satisfied with their wellbeing if they’re living in purpose built student accommodation, in comparison to halls of residence. Those in their first year are almost twice as likely to be ‘very satisfied’ with their physical health (60%), compared against those living in halls of residence (32%).

In the first year, they’re also more likely to be ‘very satisfied’ with their own mental health (34%), compared with students living in halls (23%). Throughout their stay, university students continue to be more satisfied with their physical and mental health when living in purpose built student accommodation rather than in other accommodation options.

Key finding: technology plays a huge part

For modern students, better access to technology is considered an absolute must, especially as our research shows it’s directly related to academic results. Those who achieve top grades are more likely to have prioritised technology when choosing their accommodation.

In the first year, students who achieved top grades are twice more likely to have prioritised the use of technology when choosing accommodation (19%), than those who achieved 69% in their grades or lower (9%). This trend continues in the second year. Similarly, in the third year, those who achieved top grades were significantly more likely (24%) to prioritise technology in their accommodation than those who achieved 69% or lower (15%).

When it comes to providing quality technology, purpose built accommodation scores higher than other options. Four in ten first-year students rated technology in their purpose built student accommodation as ‘excellent’, compared to less than a quarter in halls of residence. In the second year, as more students face the decision of whether to move into purpose built student accommodation or a privately rented/shared house, the gap in satisfaction between alternative accommodation widens to almost double (33% compared to 20% in a privately rented/shared house), and increases for third year students (43% compared with 25%).

Key finding: international students have their own priorities

With extra pressures and additional costs, international students take their studies seriously, reflected in their attitude to accommodation. To put it bluntly, in the first year, British students choose accommodation based on the ability to socialise: international students prioritise practicalities. As international students move into the second year, the data suggests they prioritise accommodation to help improve their grades.

Key finding: students will pay more for extra facilities

Today’s students expect more from their accommodation, and are willing to pay more to get it. Of the students we surveyed:

  • 76% said they would pay more rent – at an average of £115 extra per month – for a private bathroom.
  • 68% would pay an average of £92 extra per month to have their own cooking facilities.
  • 57% would be prepared to pay an extra £79 per month, on average, for a gym as part of their accommodation.

The appetite for these facilities gives room for developers to expand plans and deliver better, affordable, purpose built student accommodation to more students.

The opportunity for property developers

Students want space and privacy to study, a technology-enabled environment, and facilities that enhance their independence and wellbeing. Developers who can meet these requirements will be well placed to capitalise on student demand.

Crucially for developers, extra facilities are highly desirable to students. These range from a private bathroom, to their own cooking facilities, to access to a gym or swimming pool. Students are willing to pay more for these, indicating ongoing demand for highly quality accommodation. In addition, with technology considered an imperative for students, developers should make it part of project plans. Finally, with international students representing a significant proportion of the market, it pays for property developers to heed their concerns and provide accommodation purposely-built to support academic goals.


Academic performance is becoming increasingly important for today’s crop of students, with the backdrop of rising geopolitical uncertainty, higher debt levels and a tough job market. We believe it’s crucial to understand what students want from their accommodation, and how developers can cater to their growing need.

Octopus Real Estate is an active lender in the purpose built student accommodation market. Recently, we assisted with the build of a 225-unit purpose built student accommodation complex in Bristol City Centre, funded by a £16 million Octopus Real Estate loan. We’ve also provided £36 million in lending for a 502-bed purpose built student accommodation project in Coventry.

Even though it’s still a relatively small part of the accommodation on offer for UK students, we’re proud to champion the growth of this sector and the positive impact it has on students. The long-term demand for purpose built student accommodation presents a fantastic opportunity for UK property developers. But ultimately, this is about the students. The intention should be to help create a generation of healthier, happier, well-rounded students who can make the most of their studies before they tackle life in the outside world.

To see the Student Accommodation Impact Report, click here. For more information about Octopus Real Estate – property, visit the website.

Research methodology

Our research was conducted online from 30th April to 9th May 2019 by FTI Consulting’s Strategy & Research team. We spoke to a population of 1,105 students (aged 18 to 25), who presently attend, or have completed an undergraduate degree in a British university. Results were weighted to be reflective of Higher Education Statistics Agency 2017 figures for gender, university attended and region of students’ origin.



Related articles