Unite Group has warned that more students are choosing to live at home to cut costs, leaving its halls emptier than expected and putting pressure on rents and profits.
The UK’s largest student landlord, which owns or manages around 72,000 beds nationwide, said reservations for the next academic year are lagging behind previous cycles. Shares fell more than 14 per cent on the news, extending a decline of roughly a third over the past year.
Unite has secured bookings for 67 per cent of its rooms for the year starting in September, compared with 71 per cent at the same point last year and 79 per cent in early 2024. Management now expects occupancy and rental growth to land at the lower end of earlier guidance.
The company had been targeting occupancy of between 93 and 96 per cent and rental growth of 2 to 3 per cent next year. Analysts now expect earnings to fall by as much as 13 per cent, worse than previously forecast.
Chief executive Joe Lister said universities were being more cautious about block-booking rooms, citing uncertainty around domestic student demand. “They don’t want to be left with the bill for any empty rooms,” he said.
After several years of strong rental growth driven by tight supply and a rebound in international students, the market has shifted. Increased development in cities such as Leicester, Nottingham and Sheffield has weighed on occupancy and rents. Unite plans to sell assets in those markets.
At the same time, changes to UK visa rules have dampened demand from some international postgraduates, while domestic students are increasingly opting to commute from home to manage living costs.
Unite delivered rental growth of 4 per cent and occupancy of 95.2 per cent in 2025, down from 8.2 per cent rental growth and 97.5 per cent occupancy in 2024. Rental income rose 8 per cent to £428.2m, but pre-tax profits fell sharply to £97.6m after a £74m fall in property valuations.
The company has responded by cutting costs, including reducing head office staff by around a fifth.
Lister’s strategy centres on concentrating Unite’s portfolio around so-called “high-tariff” universities such as Bath, Manchester, Newcastle and King’s College London, where demand for on-campus living remains stronger.
Data suggest students at higher-ranking institutions are significantly more likely to live away from home, with staying-away rates in the high 80 per cent range, compared with around 50 per cent at lower-tariff universities.
Unite is also banking on a slowdown in new development. Lister said 15,000 to 20,000 beds are due for delivery in 2026 and 2027, but new starts are expected to fall sharply beyond that as build costs outpace rental growth.
“We are facing into a market that has changed fundamentally,” he said. “We need to position ourselves differently.”
Whether investors will give management time to execute that pivot remains uncertain, with Unite’s shares having halved since Lister took the helm.
