Britain’s largest student accommodation provider is facing challenges in filling its university halls as more students opt to stay at home to save money. The Unite Group is experiencing a decline in demand due to fewer international students and domestic students being cautious about accumulating large debts.

The company reported that 86% of its student accommodation beds have been reserved for the upcoming academic year, starting in September, but this figure is lower compared to previous years despite price reductions. This decline in reservation rates is a notable change from the high occupancy levels seen in the aftermath of the Covid-19 pandemic.

Unite Group’s share prices have dropped significantly, prompting the company to put less popular university properties up for sale and focus on key educational locations. The company aims to sell properties worth between £300 million and £400 million this year.

CEO Joe Lister remains optimistic about the future, citing increased reservations for the following academic year and strategic pricing adjustments in certain markets. He highlighted the financial burden placed on students and families due to stagnant student loan values not keeping pace with inflation.

With a portfolio of 208 properties across 29 cities, totaling 72,000 beds, Unite Group owns student accommodation brands catering to various student demographics. Despite the current challenges, the company anticipates occupancy rates of 94% to 96% for the next academic year, with rental income expected to grow modestly.

The company also revised down the estimated value of its properties, reflecting a 2.2% decrease in the Unite UK Student Accommodation Fund’s value. Analyst Max Harper predicts continued challenges in the market, citing increased rates of students living at home and declining demand for lower-tier universities.

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