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This £2,562 Saving Explains Why Students Prefer To Live With Gran

Students are often depicted with a drink in one hand and a bulging overdraft in the other. As the infamous tuition fee debacle nears the end of its second year, life as a university student really isn’t as simple — or anywhere near as cheap — as it seems.

If you’d like to start a degree, have your savings ready. For a standard three-year course, you’d be expected to pay tuition fees of £9,000 per annum, plus living expenses averaging £80 a week — supermarkets aren’t getting any cheaper!

And although some lettings agents provide inclusive bills packages with the rent, most students will be rummaging through price-comparison websites for the cheapest utility deals.

(We may all hate him, but the operatic ‘Go Compare Man’ certainly saved me from studying by candlelight!)

There’s also a hearty donation to the university in the form of course books — I was charged £247 in total, but the books will typically last for the degree and beyond.

So, understandably, when student wallets are being stretched almost to the point of non-existence, accommodation could represent the final nail in the coffin.

Generally speaking, nothing more than humble accommodation is required for students. Perhaps owned by a genteel pensioner devoid of any grandiose money-making plans, their residences tend to be cheap, have convenient landlords — often living in the same house or nearby — and are occasionally of high quality.

But what about the accomodation provided by national lettings agents, which tend to label students with price tags and where profit is always paramount? Just how much extra could students pay by renting through these firms?

What about an additional £2,562 per year.

If there’s one thing students don’t want, it’s more zeros on their receipts

Take Unite Group PLC (LSE: UTG), for example, which provides homes for more than 40,000 students in more than 130 properties and has just spent £2m buying a new site in Aberdeen. With a healthy market cap of £744m, the firm has seen its share price increase steadily to sit comfortably at 423p.

Not to mention, Unite’s rental income for the six months to June 2013 was £58m and operating profits were a tidy £44m

The firm’s Scottish acquisition is to capitalise on what Richard Simpson, Unite’s managing director of property, calls, “favourable supply/ demand dynamics” in a city expected to “experience continued growth”. However, growth and growing demand can mean only one thing, growing prices — and if there’s one thing students don’t want, it’s more zeros on their receipts.

While Unite’s rising share price may reflect investor optimism and confidence, does it necessarily reflect the quality of service that the student customers receive? 

Well, it’s hard to dispute such a decisive investment in Aberdeen is going to benefit shareholders; Unite’s forecast 10% gross rental yield will certainly help annual revenues, and higher cash flow is never bad by any stretch of the imagination. But as I’ll explain right now, greater profits may not necessarily correlate to greater quality or customer service.

A cash machine to be sucked dry of notes

I study in Canterbury and have lived in properties offered by national landlords similar to Unite. If my two years, soon to be three, in student accommodation have taught me anything, it’s that very rarely are my necessities and experiences considered.

In the past month, I have encountered three separate incidents that brought me to question whether I was a tenant, an inconvenience or a cash machine to be sucked dry of notes.

First on the list, door locks. I waited three months beyond the date that I was quoted, despite numerous and insistent phone calls, for a lock to be placed on my bedroom door. The lock was supposed to be installed when I moved in, not after the first term.

Secondly, despite living with four others, I’m the only one with an ensuite. The other four have been showering in my room daily because their communal shower has not been working since Christmas Eve — the shower still isn’t fixed.

The final incident was a surprise deposit for my third year in student accommodation, starting in September. I paid £150 in upfront payments for my first university year, for my upcoming third year I’ve paid nearly £500.

The humble granny landlord

I’m hardly the classic image of an over-spending student — I’m yet to touch my overdraft.

But I’ve been scouring every money jar and the back of every sofa in search of money to keep food on the table — all because of a relatively extortionate set of up-front fees.

The humble granny landlord across the street doesn’t produce balance sheets and annual reports — as interesting as those documents would be — but the national student lettings agencies have the legal obligation to reveal their financial performances.  

As such, I know Unite predicts solid 3% rental growth this year and expects a 10% gross rental yield from the recent Aberdeen acquisition. But when budgeting and staying alive is a student’s one and only concern, this shareholder-friendly strategy is not exactly popular with the tenants.  

How much can a search save?

I wanted to test whether local landlords really could be cheaper than the national firms, so I’ve chosen three university cities — Aberdeen, Nottingham and Reading — for a quick comparison.

For each city, I’ll detail the cheapest accommodation offered by Unite and then compare that to the cheapest like-for-like property, where possible, from a local lettings agent that was found with a five-minute search.

Keep in mind that the following properties are chosen chiefly for their affordability. Unless otherwise stated, each property features wi-fi, bills, laundry services, a complete set of kitchen appliances and full furnishings.


Unite — St Peter’s Court: A classic ensuite, £99 per week, 44 week lease.

Local landlord: A standard ensuite, £89 per week, 44 week lease. Also includes free bus pass to Nottingham University.

Both properties feature identical amenities, with the local-landlord option providing “designer” furniture that is of noticeably higher quality. But with a simple Google search, you would save yourself £440 per year by using a local landlord, and you get a free bus pus for cruising the city.


Unite — Mealmarket Exchange: A classic ensuite, £134 per week, 51 week lease. 

Local landlord: Standard ensuite, £103 per week, 51 week lease. No wi-fi.

There’s a notable difference in price and the lack of wi-fi is unfortunate for the local property, but it does still feature wired internet at speeds of 20mb/s. A quick search revealed that a year with a local landlord would save a sum of £1,581.


Unite — Kendrick Hall: A classic ensuite, £117 per week, 51 week lease.

Local landlord: Standard non-ensuite, £65 per week, 51 week lease. No house alarm, dryer or dishwasher. 

Reading was somewhat of an anomaly. Despite me spending nearly an hour searching online, Reading’s ensuites were very difficult to find. As such, the next best option was a standard non-ensuite room priced at £65.

The yearly saving if you used a local landlord here would be an enormous £2,562.

£2,562 savings every year

Housing prices are, by no means, black and white and it could be argued that you simply do get what you pay for — most of the time. But the ultimate goal for students is to budget well and not live outside of their means.

Students can receive an inordinate amount of pressure from their course and Unite’s desire to build on the £37m profits reported earlier this year is going to put even more pressure on their residents’ wallets.

From just a few minutes of searching, I reckon students could save anywhere from between £400 to £2,562 a year, simply by using smaller, independent landlords rather than large, public firms such as Unite. As a student, you want to be funding you own lifestyle, not those of faceless shareholders of profit-focused accommodation companies.

What’s more, granny and her lovely home-cooked meals can offer students a friendly face, friendly service, and even friendlier savings — as long as you don’t do what I once did and refuse a Sunday roast.

I’m not allowed in that house again. 

> Douglas does not own any share mentioned in this article.