London Student Housing: Why Demand Keeps Growing

London topped the QS Best Student Cities ranking for a fourth consecutive year in 2023. To attract international students, universities from across the UK and abroad have been opening London campuses. At the time this data was gathered, seven non-London institutions had leased over 1.45 million square feet of teaching space in the city between them — a figure that doesn’t even include expansions by overseas institutions such as New York University. London had become a must-have location for higher-education providers.

Strong Demand for Teaching Space in London

According to CoStar data, regional UK universities have been moving into London in search of teaching space. Over the three years to when this data was gathered, non-London universities had leased 350,000 square feet of teaching space in the city — more than double the figure from three years earlier. Universities from York, Scotland and Sheffield were among them; Sheffield Hallam University’s London campus, for instance, was due to open for the 2025/26 academic year, with plans to enroll 5,000 new students by 2030. This wave of expansion reflects London’s strong pull for higher education, and is also bringing more jobs and opportunity to the city.

Not to be left out, several London-based universities — including London South Bank University, Queen Mary University of London, Imperial College London and UCL — also had concrete expansion plans of their own. UCL’s new East London campus, for example, offers 60 degree programs and is designed to hold 3,600 students and 260 staff. International universities have their eye on London too: New York University had, in the prior year, invested £130 million in London, taking on 75,000 square feet of new teaching space.

Recent research found that education providers were, at the time, looking for a combined 492,000 square feet of teaching space in London — the highest level on record. The trend shows that opening a London presence has become the thing to do in higher education, with institutions competing to expand their reach and resources — largely to reach a wider pool of students, international students especially.

London Remains a Top Study Destination

London’s exceptional location and international standing mean its graduates find it easier to build a global network. Survey data at the time found London remained a top choice for international students, and media coverage cited five reasons:

1. Abundant internship and networking opportunities. As one of the world’s financial capitals, London is home to many international companies, giving students in the city easier access to industry leaders and more work and internship opportunities.
2. World-class academic resources. London is packed with globally ranked universities offering a huge range of programs.
3. Students from around the world. London has a large student population and, as a genuinely global city, students there come from all over the world, speaking more than 300 languages between them — making it easy to pick up a new one.
4. Convenient city transport. The Underground, trains, bikes and river services form a comprehensive transport network that makes it easy for active young students to get around.
5. Rich history and culture. London’s diverse and deep cultural heritage helps broaden students’ horizons. The city has 380 public libraries, more than 200 professional theatres, more than 800 cinemas, and hosts more than 30,000 live music performances a year — a genuinely vibrant city.

Strong Demand for Student Accommodation

Rising demand for student housing has kept London’s student accommodation market strong. Unite Group, the UK’s largest student accommodation provider, was fully let for the 2022/23 academic year at the time, with rental growth of 3.5%. The outlook for 2023/24 looked strong too, with 83% of rooms already booked at that point (compared with 67% at the same point the previous year).

As in-person teaching fully resumed, large numbers of overseas students were expected to return to study in the UK, and accommodation waiting lists were expected to keep growing.

For students and parents considering London as a study destination, it’s worth planning your property purchase or rental well ahead of time, to avoid being caught out by London’s tight supply-and-demand balance and rising rents.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Sources

CBRE research and market commentary; Unite Group occupancy and rental data; QS Best Student Cities ranking, 2023 edition.