Lavanda’s research has revealed that universities are successfully raising tens of millions of pounds by renting out empty student halls to combat the higher education sector’s funding crisis.
According to revenue data obtained under Freedom of Information, at least 64 UK universities are making much-needed extra cash by renting out student accommodation to holidaymakers and other travellers during the summer holidays.
They netted a total of at least £98,825,919 over the past three years, adding an average of £2,102,679 to uni coffers.
These include University College London, which generated £14,913,266 by letting out up to 3,200 rooms during the past three summer holiday periods. It was followed by London’s Brunel University, which generated £10,106,631 over the same period by letting out up to 2,357 student rooms.
Other top earners included the University of Nottingham, which made £9,559,799 in a similar period and the University of St Andrews, which yielded £8,260,000.
Lavanda highlights that many universities did not disclose their summer holiday rental revenue, meaning the actual figure will be significantly higher. The data suggests some institutions are ramping up their summer rental programmes in response to extreme financial pressures affecting the sector.
Summer rental income at Queen Mary University of London, for example, was expected to increase by 52% last year compared to the year before, rising from £1,400,000 to a projected £2,130,000.
The research also identified at least nine universities that do not rent their student accommodation to non-students during the summer break. These included Newcastle University, which owns 3,372 rooms, the University of Leicester, which owns 2,633 rooms and the University of Strathclyde with 1,513 rooms.
It comes after Home Office figures revealed a 16% plunge in applications between July and September last year compared to the same period in 2023. In a blueprint published on 30 September, Universities UK – which represents 141 institutions – said the current ‘boom and bust’ approach to international students who pay significantly higher fees than their domestic peers is ‘unsustainable’.
“With some universities reportedly on the brink of bankruptcy, it should come as no surprise that institutions are seeking out innovative new ways to sweat their assets.
“Not only does renting out empty rooms generate much-needed additional income for universities, it also boosts local economies that rely on student spend throughout the academic year.
“This is a classic example of how a more flexible approach to real estate can deliver significant social benefits, something the government would do well to bear in mind as it sets about overhauling our archaic planning system.
“Britain’s universities are the envy of the academic world, so it’s critical that this kind of resourcefulness is encouraged to help our institutions remain financially healthy, agile and competitive. In doing so, they can continue to deliver world-class education and research while also keeping accommodation costs as low as possible for students.”
Fred Lerche-Lerchenborg, CEO, Lavanda
According to the NUS Student Housing Survey 2024, a third of students struggle with housing costs, with 17% reporting they had resorted to using food banks. Separate research by Blackbullion found that nearly half (46%) of students classify themselves as ‘commuter students’, with 20% staying at home due to necessity.
Last year, Lavanda published its Global Flex Report 2024, which revealed an explosion in the number of student accommodation and Build to Rent operators planning to double down on Flex rental strategies across their portfolios this year.
According to the research — which included responses from landlords and operators of more than 1.3 million student and Build to Rent units — flexible renting strategies contributed at least 20% on average to net operating income last year.
Freedom of Information data confirms the Global Flex Report’s prediction of a surge in student accommodation owners and operators increasing short- and medium-term rental activity in 2024. According to the report, 47% of operators plan to expand Flex rental offerings this year.
