Unite Students, the UK’s leading owner, manager and developer of student accommodation, has published an update on the potential impact of Coronavirus on its business.

Coming from such a substantial player in the field, this provides an interesting insight into the student letting market and how changes could impact on many lettings agents and landlords who rely partly or wholly on this sector for their incomes.

2019/20 academic year

In line with our previous announcement, we have contacted students to see if they wish to leave their accommodation for the summer semester of 2019/20.

Based on cancellation requests received to date, we expect to forgo rent on around 43,000-46,000 beds representing around 62-65% of all owned and managed beds.

Our remaining beds are accounted for by students who have chosen to continue their stay with us and beds let under nomination or lease agreements, where Universities collect rent directly from students (21% of beds).

Reflecting the strength of our University partnerships, we have received 94% of the rent due to date in April under these nomination and lease agreements.

Remaining payments by Universities for the summer semester are staggered between April and September 2020.

Overall, we expect a reduction in income from the 2019/20 academic year of 16-20% on a Group share basis, an improvement on our previous expectations.

2020/21 academic year

Reservations across the Group for the 2020/21 academic year are currently at 80%, compared with 81% at the same time last year.

Positively, we have seen healthy levels of demand from UK students, reflecting our decision to switch the focus of our sales and marketing efforts to the domestic market.

We are still seeing enquiries from international students but, as expected, demand has slowed.

Nomination agreements account for 70% of reservations secured for 2020/21 with over two-thirds now contracted, including multi-year agreements and single-year extensions which have already been signed.

A number of Universities have already begun to allocate students to us for the new academic year, reflecting confidence around their accommodation requirements.

The majority of the non-contracted income is accounted for by High and Mid-ranked Universities where we have long-standing relationships.

We will maintain a close dialogue with our University partners as their accommodation requirements for 2020/21 become clearer.

In the event beds are not taken up by Universities, we are ready to shift our sales focus to a direct-let basis where we are already targeting students living in houses of multiple occupancy (HMOs).

Higher Education sector outlook

The Government’s central planning scenario is for the 2020/21 academic year to start in September, broadly in line with the usual admissions cycle.

This follows confirmation that students will receive their A-level results on 13 August as originally planned.

However, there is still some uncertainty over start dates for the academic year, which could result in both a later start and finish to the autumn semester.

Universities UK recently proposed a package of support measures for Universities to counter the risk of a reduced intake of first-year students from non-EU countries.

The proposal includes increased research funding and one-year student number controls to ensure the financial viability of all Universities.

The Government is expected to publish its response in the coming weeks.

We will continue to work closely with our University partners to adapt to any changes in admissions for the coming academic year.

There are 1.5 million full-time students in the UK seeking accommodation, of which 1.2 million are domestic students living away from home and international students studying multi-year courses.

We expect Universities to offset a potential reduction in first-year international student intake by recruiting additional UK students from surplus applications, which totalled 101,000 in the 2019/20 academic year.

We also expect demand for purpose-built accommodation to be supported by market share gains from the 865,000 students currently living in HMOs.

We have already shifted the focus of our marketing activity to target students living in HMOs, where we believe that our offer of purpose-built, affordable accommodation with a range of value-added features such as 24-hour security, all-inclusive bills and on-site support will be considered an attractive alternative.

Even a small shift of students from HMOs to purpose-built student accommodation would help to substantially offset potential reductions in international student numbers.