Rent for student rooms in London increases by a fifth with some unable to pay for basic living costs

Annual rent for a student room in London has risen by nearly a fifth in two years, according to a new report.

The report by student housing charity Unipol and think tank the Higher Education Policy Institute (Hepi), warned the “affordability crisis” in the capital’s housing market was putting students in an impossible position as they were struggling to pay for basic living costs and could be “priced out”.

The findings - which includes data from 75,948 student rooms – found that the average annual rent for a room in London from a Purpose-Built Student Accommodation provider is £13,595 in 2024/25, up from £11,500 in 2022/23 – an 18% increase in two years.

Around 14% of purpose-built student accommodation rooms in London cost more than £20,000 per year compared to 5% in 2022/23, according to the survey.

The report also found the maximum maintenance loan for students is now less than the average rent in London.

Some of the most expensive rooms, primarily private studios in areas such as Bloomsbury and King’s Cross in north London, cost more than £40,000 per year, with rents of up to £800 a week for 51-week contracts.

The maximum maintenance loan for an English student studying in London and not living at home is £13,348 this year.

This leaves students needing to find an extra £247 to cover the average rent – and it does not take into account any other living costs, the report said.

Victoria Tolmie-Loverseed, deputy chief executive of Unipol, said: “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.

“This affordability crisis is putting students in an impossible position. The findings in the report underscore the urgent need for action from policymakers, universities and accommodation providers to address the affordability crisis in London’s student housing market.

“As rent levels continue to rise and the supply of affordable accommodation stalls, it is critical that the sector responds to ensure students can continue to study in London.”

The report has called on universities and private accommodation providers to offer more financial incentives, bursaries and support to students in London.

The Government should overhaul the student maintenance loan system which leaves many students unable to cover their basic living costs, it added.

Nick Hillman, director of Hepi, said: “The numbers in this report are shocking.

“The average purpose-built student room in London now costs more than the maximum maintenance loan, leaving students with a shortfall even before they’ve bought any food, paid for their travel or covered other living costs.”

He added: “We have sleepwalked into a situation where four-in-10 English students studying in London are now living at home, often out of necessity rather than preference.

“Others feel unable to study in London at all, even though they had planned to do so.

“As a result, higher education in London is coming to look very different from higher education elsewhere in the UK and by accident rather than design.

“It is time for a full and open review of student maintenance support, looking at the different needs of different students.”

Amira Campbell, president of the National Union of Students (NUS), said: “Rents are rising and maintenance is not keeping up.

“We need to see the government step up and reform student funding, so it increases with inflation so that students’ parents aren’t scrambling for thousands and thousands of pounds just to ensure their child has a roof over their head.”

A Department for Education (DfE) spokesman said: “Our plans for higher education reform are fixing the foundations to deliver change for students.

“To break down barriers to opportunity for young people who want to attend university, we are increasing maximum loans for living costs for the 2025/26 academic year by 3.1%, in line with the forecast rate of inflation, so that more support is targeted at students from the lowest income families.

“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.”

Have you heard The Trapped? Listen as Daniel Hewitt exposes the UK's dirty secret.