UK universities are cashing in on renting out student accommodation to non-students, amid a funding crisis which could force some to fold.
Almost £100m has been made by universities across the UK in the last three years – with some institutions doubling the income they receive from summer accommodation rentals in that time, Freedom of Information (FOI) request figures show.
Universities have long raised extra revenue by renting out accommodation to non-students during breaks and by hosting conferences and summer schools.
But the FOI figures suggest some institutions are ramping up their summer rental programmes in response to financial pressures affecting the sector.
University College London generated the most money from private rentals between 2021/22 and 2023/24 at £14m followed by London’s Brunel University at £10m and the University of Nottingham, which made £9.5m.
Between 2021/22 and 2023/24, Queen Mary University in London increased its revenue from £848,000 to £2.1m – a 151 per cent rise.
Brunel’s income from summer rentals to non-students surged from £2.1 to £3.9m – a 93 per cent rise.
The Office for National Statistics predicts that 72 per cent of universities will be in deficit this year due to a combination of rampant inflation, frozen tuition fees and a downturn in international students because of tighter visa restrictions.
Brunel University was among institutions to report losses in their financial accounts for 2023-24, while Nottingham and University College London have been reported as top-ranking Russell Group universities attempting to reduce budgets and ramp up efforts to attract foreign students.
In total, the FOI data showed that universities across the UK have made £98,825,919 from renting halls of residence since the 2021/22 academic year, adding an average of £2,102,679 to their coffers.
Some universities are advertising their accommodation via online travel agents, including Booking.com and Expedia, while others are offering them on their own websites.
Universities UK, which represents 141 universities, said a key reason behind renting out summer accommodation is to save students money so they are not paying unnecessarily out of term-time and it can help boost university finances amid the crisis.
A spokesperson for the organisation said: “Summer rental programmes, including hosting conferences and summer schools, can be a good way for universities to drive efficiency and diversify their income stream at a time when a freeze on tuition fees and high inflation have challenged their financial position.
“They are concentrated outside of term time, when the majority of students do not require access to accommodation. This allows a balance that works for both the universities and the students who do choose to remain in their accommodation.
“Where a student is concerned about housing availability, universities are always on hand to support them to find the best solution for them.”
A spokesperson for Brunel University of London said it has always hosted educational summer schools and conferences on campus during the summer.
“The revenue generated from renting the accommodation and facilities reflects our longstanding operational model,” they added. “We always prioritise on-campus accommodation requests from Brunel students, and we do not mix our students with non-students in our summer programmes.”
A University College London spokesperson said the income made during the summer when students are not at university “is invested directly back into our university, helping to improve student facilities, education, support and experience, as well as supporting our world-leading research”.
The research was commissioned by Lavanda, which manages private short-term rentals, which received data from 136 of the UK’s 166 universities. Its CEO Fred Lerche-Lerchenborg said summer rentals are a good way for institutions to “drive efficiency and diversify their income stream” at a time when a freeze on tuition fees and high inflation have challenged their financial position.
He claimed that some universities charge 50 or 100 per cent higher rents to non-students outside of term time and said this is both “attractive to students” and helps boost university budgets.
“It is critical that this kind of resourcefulness is encouraged to help our institutions remain financially healthy, agile and competitive,” he said.
“In doing so, they can continue to deliver world-class education and research while also keeping accommodation costs as low as possible for students.”
But it comes as students face spiralling costs. Labour has announced that fees will rise this year to £9,535. Further rises could follow in later years, but that has yet to be decided.
When she announced the tuition fee rise in November, Education Secretary Bridget Phillipson said the Government was having to “take the tough decisions needed to put universities on a firmer financial footing”.
At the same time, the cost of private rent in some university towns and cities in England is now more expensive than the maximum student loan available.
The costliest regions to be a student include the South West and South East of England, where loans no longer cover rent, The i Paper previously revealed, as student rental costs are set to rise by nearly 10 per cent in September – wiping out the 3.1 per cent rise to the maintenance loan set out by the Government.
The University of Nottingham did not respond when asked for a comment.
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