What Has Happened to the Student Rental Market in Brighton

22nd July 2025

If reading this article, chances are you already have a feeling for this shift in the market and you’re looking for answers. If you are not aware of the current market conditions and have happened upon this article by other means…. then it’s important to know that the student market in the city has wavered greatly this season.

Property markets fluctuate with natural cycles and peaks and troughs, however it’s not being overly pessimistic to state that we seem to be in a particularly deep and perpetual trough.

We are just about getting used to “heightened” interest rates, a driving force behind value drops since late 2022, we have stomached section 24, the Renters Rights Bill (RRB) on the horizon, as well as reforms to Minimum Energy Efficiency Standards (MEES).

Despite us property folk liking a moan, relatively speaking, we don’t have it that bad. However, even the most optimistic amongst us are struggling at the moment. The one saving grace of late? The rental market! … right?

For student HMOs in Brighton and Hove, of which Coapt let or manage around 15%, we saw record climbs in rents for the tenancies currently in place. The 2024-25 academic year, and preceding rental season culminated in average rental rises of 12%. I have written previously about how this was in part artificial, and due to stagnation in the two years prior but the point remains – the rental market has been great! Against a backdrop of increased borrowing costs, increased spending to stay complaint, and all the associated stress, being able to easily secure a quick and lucrative rental has kept the market afloat and worthwhile. Until now.

The current season, seeking lets for the 2025-26 academic year, has been slow. Painfully slow. There remains a large number of student properties on the market, and at a time of year which is now anxiety inducing for many. But why? And why so suddenly when last year was so strong?

As always, it’s never simple, but we have done the leg work and from my research, here is my summation of the key trends and likely causes:

Raw Student Numbers Decline & University Ranking Changes
One day, many years from now, we will be able to write an informed article about market conditions without mentioning Brexit. We are not there yet though.
Brexit, but also a large number of other economic and socio-political reasons, has lead to student numbers falling. I could write a whole book on why, so for now just know that they are.
International student numbers in particular have dropped, and the remaining market is very changed, with a shift in the country of origin of overseas students. Data produced by sources such as StuRents have indicated that there has been a big drop off in students from countries which data shows are willing to spend more, and an increase in student demographics who data shows have less to spend. So numbers have decreased, and the budgets of those who remain is lower.
This is a national trend, however is being exasperated locally by a the dropping appeal of the University of Sussex in particular:

Times Higher Education (THE) World University Rankings:
University of Sussex
• 2016: 140th.
• 2017: 149th.
• 2018: 147th.
• 2019: 161st.
• 2020: 146th (rising 15 places).
• 2021: 160th.
• 2022: 151st.
• 2023: 201-250th.
• 2024: 201-250th.
• 2025: 201-250th.

Whilst Coapt are yet to see student application numbers from my old stomping ground up at Falmer, it’s safe to assume they are down. Here in-lies a first clear reason for a slow season. A drop in first-choice applications, or unconditional offers means a drop in certainty of living in the city for a number of students, and so they don’t seek housing. Universities need to fill seats to gain funding, and so we could also deduce that Sussex will take on larger numbers of students from clearing than they would usual, but this then pushes a chunk of the market far later in the season, on or after A-level results day.

Purpose Built, Serviced Accommodation (PBSA)
Over the past few years Brighton has started to resemble Gotham city (A comparison made to me by a client, who would likely be upset if I claimed this to be my own observation). Blocks have risen from the ground along the Lewes Road corridor, as well as on London Road, and the ever-growing Varley Park project on Coldean Lane. The new accommodation largely comprises smart studio apartments for students, styled as if they are university halls, but owned and operated privately, all be it with some vested and likely financial interest form the academic institutes still.
This has been ongoing for some time though, and whilst a lot of rooms have been built, it takes 5 or 6 units to make a whole HMO redundant. Any regular readers of Coapt news, or those who have spoken to me personally during these past years will also know that we long saw these builds as positives. They cater for the “first year market”, a demographic not usually favoured by private Landlords. An increase in availability for first years also allows for the Universities to take on more students, who eventually become second and third years and need private market housing.
Further to this, the PBSA in Brighton is generally considered a different market. Rooms available in these blocks have regularly been asking upwards of DOUBLE the price of rooms in a private market house-shares. As such only the upper private market, in terms of condition and price, could have expected direct competition.
However, referring to the previous section, student numbers are down. First year applications are down. And budgets are down. PBSA providers are therefore adapting. Prices are still generally higher than HMOs, but the gap has closed massively. Operators are now actively pursuing students already in the city too, later in their studies, rather than prioritising the first year market. And thus, the circles which represent the prime markets for each accommodation type, PBSA Vs HMO, are starting to more resemble a Venn diagram.

Square Pegs and Round Holes
HMOs are getting bigger. Student friendships groups are getting smaller. Or at least the size of the groups willing to live together.
I have written many times about the negative effects of Brighton’s Article 4 directive, and the limiting of new HMOs being converted from residential homes. HMOs values were inflated for some time as a result. If you wanted to operate a HMO, you are presently limited (in most cases) to buying a property with planning consent already in place. Alternatively, if you are already in the HMO market, and have equity to invest, rather than buy a HMO at an inflated price tag, why not develop what you have? The average size of HMOs is therefor growing.
The reasons for student group sizes getting smaller on average is less black-and-white, though like most matters, I have an opinion and hypothesis.
For starters, young people are growing less social. More time is spent at home, and even more specifically in bedrooms, rather and communal lounges. Yes there are some rather large stereotypes here, but it’s true to a degree that young people are now more likely to be at home scrolling on TikTok than at social events meeting others.
A more quantifiable reason for groups shrinking is again linked to PBSA. When I moved to Sussex University in 2015, almost all first-year accommodation and halls were flat shares. I have an en-suit bedroom, but still shared kitchen facilities with 5 others. Whist student groups for HMOs are no doubt forged in a range of ways, including course mates and societies, it’s safe to assume that many groups remain together having been forged in halls. Perhaps they lose a friend along the way, if Tim always cooks smelly fish, and gain some too, if Dave has a mate who wants to join the group, but the point is that first year accommodation was a cookie cutter, forming groups, generally of 6.
All the new PBSA accommodation I have had the pleasure of touring are complete studios. They include kitchenettes, and whilst there is social space, there is no set need to use it, and if one wished, you could live entirely independently and never speak to another occupier of the building. The same can be said for some of the purpose-built halls, not just PBSA.
The result? Students are “forced” into forming living groups. They can start off on their own, and unless actively social, may remain on their own, or at least form much smaller groups.
HMOs are getting larger, but student groups smaller. The effect of this is striking, over the past few years it has become increasingly more difficult to let 5+ bedroom properties, whilst 4 and 3 bed HMOs are in most demand.

Snowballs
As I write this, it is 24 degrees in Brighton. Though snowballs are still forming in the market. (I’m currently reading an Edgar Allan Poe Biography, can you tell?.. maybe not)
The market started slowly, right from the off in November when any good agent and proactive Landlord markets their HMO. It was slow for all the reasons mentioned above, and more. If the market is slow that means properties hang around, and the percentage of available properties has been higher, month on month, than it has been for some years. The outcome of this is less pressure on students to secure housing. If they miss out on the one they like, there is no concern, as there are plenty more around! Further to this, and as time goes on, astute students (which should be most given they are academics after all) may have even notice that prices are now falling, and quickly. Just as you as an investor may try to time the market and “buy low”, vigilant students can presently wait, safe in the knowledge there will be plenty of options for them for housing, and the later they leave it, the better deal they get.
Somewhere over on a different mountain in our proverbial mountain range representing the market, there is another snowball rolling down another hill…
With the miss-match between supply and demand for property sizes, good agents are adapting. Coapt have had great success finding solutions for larger properties including letting on a room by room basis, or offering 6 bedroom houses as a 5, with a games room, or a 5 bedroom house as a 4, with an office space. This is working well as a solution for larger properties, and offers an alternative route to secure income and still strong rents (often the same total rental can be justified, just much more per head as they benefit from the bonus toom). Landlords reading this with 4 or 3 bedroom HMOs available may be confused by this article, as I repeatedly state that “smaller” HMOs are still in high demand. However now the penny may drop, that whilst there is under supply and over demand for these properties, those with more bedrooms are suddenly encroaching on your same market. Did I already use the Venn-diagram analogy for converging markets?

Is there any solace, and what is next?
So this has all been a long way of saying what we already know- the student market is weakening, at least for this year. But all is not as bad as it may seem, I have already spoken of the late market rush we hope for, from first year students in clearing, but also that many students in the city still need housing, and just haven’t had the need to do so quickly. It’s getting down to the wire and they will need to find something soon.

So what next? The simplest answer is the markets adapt. Whenever the supply-demand equilibrium shifts, if demand cannot be controlled, supply will drop. I have written recently about HMOs selling back to the residential market. The “HMO premium” created by Article 4 has reduced and in some cases you can now sell for more to Mr and Mrs Smith, and their growing family, than to Brighton Landlord Properties Limited. Suddenly Article 4 becomes a positive as well. HMOs are leaving the market, but not being created, and so the pool decreases. Even if it is a low number selling residential, it’s still only one direction of travel.

We can’t control student demand much, but we can manipulate it and adapt. As commented previously, it is much more common now to be creative, offering your property to a range of group sizes, to spread your net far and wide. In fact, in the face of the Renters Rights Bill, I personally forecast that in as soon as 4-5 years time, letting an HMO on an individual basis, room by room, will become the default set up, as opposed to jointly liable agreements. Watch this space!

So the market changes. Some leave, others adapt, but property values always rise with time. That is a mantra which has remained true, almost forever.

Picture this… Several years from now the market has compressed. There are less HMOs available, and we have weathered the rocky waves of the RRB and MEES. Supply Vs Demand is now healthy again, and in fact we are racing in the other direction. Fundamentally there is a UK housing shortage, and this becomes our new solace. So what happens, Capital value of HMOs keep up, rents rise dramatically, and we are all hugging and dancing.

So what is my advice to HMO Landlords at the moment? Well you may be in tough spot.

A new higher interest rate and facing a potential void or a much reduced rent to avoid a void.

If you can balance that equation, even it it is marginal. Buy. Buy. Buy. I have long disliked the simplicity of the approach of “timing the market” as you can tell, I believe the market to be far too complex for there to be set best times, and personal circumstance should always come first. But right now, it really is that simple… the market is tough, capital values are down, and there are opportunities. Initial yields may be ok at best, and you may gain a few more grey hairs, but once out the other end you will be all the better for it!

…mind you, I may just be a little bias given my type of work.

Adam Coffin, MSci, MNAEA, MARLA
Sales Manager