Student loan crisis spreads to property as accommodation giant hit

Pui-Guan Man

Wed, February 25, 2026 at 12:25 AM GMT+9 3 min read

More than £300m has been wiped off the value of Britain’s biggest university accommodation provider as the student loan crisis starts to grip landlords.

Shares in student property giant Unite dropped by as much as 10pc after it effectively issued its third profit warning in four months.

Unite said increasing numbers of students in the UK are opting to save money by choosing to live at home rather than rent accommodation.

Ucas data suggest that the number of 18-year-olds intending to live at home while studying reached a record high in December, rising by 7pc on the previous year.

Tim Leckie, an analyst at Panmure Liberum, said changes made to student loan repayment terms had led to “carnage” in the property sector.

In 2022, the Government overhauled repayment terms for students so that more borrowers would have to pay back their loans in full, shifting more of the burden of tuition costs onto students.

Mr Leckie said: “There’s been massive changes in the incentives and outcomes for students. The economic rewards of higher education have changed dramatically.

“That’s pretty hard when inflation’s been high and the cost of living’s been increasing. That, and more importantly the extension of the payment window from 30 years to 40 years, has increased the tuition students are liable for by 43pc.” Under the changes, loans will be written off after 40 rather than 30 years.

Mr Leckie said more people were now questioning the relative value of a university degree, adding: “The outcomes for students upon graduation have not paced with the economy at large. Graduate wages have stagnated for a decade, graduate employment looks more shaky and minimum wage has increased.

“So more students and their families were asking, is it worth it? And it’s not over yet. More people, year on year, are staying at home. At the same time, overall student numbers are falling. After 2030, the number of 18-year-olds here is forecast to fall.”

John Cahill, an analyst at Stifel, said: “Affordability for UK students is a problem, and the student loan situation is heading towards a full-blown political scandal.”

He added: “Something will have to change there because the situation is unsustainable, but that will take a long time and might even need a change of government, given the state of the public finances. So for now, nothing will change, though reform … will happen eventually.”

Mr Cahill added that, until recently, Unite had relied on international student numbers to help generate more profit from rents, but those numbers have been falling.

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Occupancy at Unite fell to 95.2pc for the 2025/26 academic year, from 97.5pc in the previous year, with vacancies most concentrated at its buildings in Leicester, Nottingham and Sheffield.

Unite said demand from international postgraduates has shrunk in the past two years on the back of stricter visa policies.

Mr Cahill said: “Unite is replacing those students with UK domestic students but they cannot pay those same very high rental rates.”

Meanwhile, Paul May, of Barclays, said a lack of clarity over the extent to which affordability will affect student demand was “spooking” investors.

He said the debate was “where this bottoms out”, adding: “Do rents need to drop a little, or a lot?”

Earlier this year Unite abandoned plans to build hundreds of student flats in central London, while also pushing back delivery of a large project in Bristol.

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