Students priced out of London as rents rise faster than loans

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Poorer students are being priced out of going to university in London because spiralling rent costs are outstripping the value of maintenance loans.

An analysis of student housing costs in the UK capital found that average student rent of £13,595 in 2024-25 exceeded the maximum loan for students in London of £13,348 for the first time. 

The findings will fuel demands for the government to offer more support for poorer students who are facing a mounting “cost of learning crisis” that is putting them off going to university, according to the Higher Education Policy Institute think-tank that co-produced the study.

The government announced last month that it was allowing university tuition fees and maintenance loans to rise by 3.1 per cent after a decade-long freeze, but rental costs in London are rising nearly three times faster, the report found.

Tuition fees will rise from £9,250 to £9,535 in 2025-26 while the maximum maintenance loans for students in London will increase to £13,762 — an uplift of just over 3 per cent at a time when rental costs in the capital rose by a total of 18 per cent over the past two years, according to the analysis.

Education secretary Bridget Phillipson said at the time of the fees announcement that the government was calling on universities “to significantly step up work to boost access for disadvantaged students and break down barriers to opportunity”. 

HEPI director Nick Hillman said the figures were “shocking” and pointed to the urgent need for a national review of student maintenance.

“Student accommodation falls through the cracks in Whitehall and yet the government wonders why demand for higher education is down at a time when the number of school leavers is growing,” he added.

Universities UK, the sector lobby group, said November’s uplift in maintenance support was a step in the right direction, but not enough.

“If the government wants to promote social mobility, it must review the maintenance support package to ensure people from more disadvantaged backgrounds are not deprived of the chance to go to university — or their university of choice — because of costs,” it added.

The analysis was conducted by Unipol, the UK’s largest student housing charity, using data from the triennial Accommodation Costs Survey, a long-running survey that began in 1967 and this year focused solely on London.

The report warned that unless action was taken, the situation in the London student rental market could be a harbinger of things to come in other parts of the country where rents are still more affordable relative to incomes. 

“The stakes are high: will students on average incomes be able to go to their university of choice in years to come?” the report said.

Unipol deputy chief executive Victoria Tolmie-Loverseed said that a combination of rising overheads, higher construction costs and increased compliance requirements were all pushing rent levels higher.

“London is a renowned global hub for higher education, but our report shows English students receiving the average student loan will struggle to pay their way and could be priced out,” she added.

The Department for Education noted the recent 3.1 per cent rise in maintenance loans and said: “We recognise the concerns of some students about the availability and cost of accommodation, and expect universities and private landlords to ensure their provisions are affordable, fair, clear, and promote the interests of students.”

Data visualisation by Amy Borrett