Unite Students increases profit but repeats warning of Building Safety Regulator approval delays of around six months
A 500-home student accommodation scheme in Bristol has been delayed until 2027 due to hold-ups in gaining ‘gateway 2’ approval from the Building Safety Regulator (BSR), developer Unite Students has said.
The student housing specialist, in its results for the year to 31 December, said its Freestone Island scheme which had been due to complete in time for the start of the 2026/2027 academic year will not now finish until 2027.
The developer repeated its previous warning that approvals required by the BSR under the Building Safety Act (BSA) are adding ”around six months to development programmes.”
It said the delays have contributed to its new supply in the year to 31 December being ‘constrained’ at 11,000 beds.
It said: “New supply of purpose-built student accommodation is also down 60% on pre-pandemic levels, reflecting viability challenges created by higher costs of construction and funding as well as planning backlogs and time required to secure BSA approvals.” Under the BSA developers must get approval for projects involving high-rise buildings over 18 metres (HRBs) from the new regulator at three separate points. Several developers have reported hold-ups when trying to obtain ‘gateway 2’ approval, which is needed to enable construction to start.
Despite the delays, Unite Students increased its overall turnover by 8% from £276.1m to £299.3m.
Its pre-tax profit more than quadrupled from £102.5m to £444m. This was due in large part to a revaluation gain of £239.6m, compared to a loss of £61.2m the previous year. Its operating profit excluding one-off valuation gains increased more marginally from £154.7m to £168.1m.
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Unite Students reported rental growth of 8.2% in the year up from 7.4% the previous year. However it expects growth to slow to 4% or 5% this year. The group has a pipeline of 7,676 beds located at Russell Group universities.
Unite said it is benefiting from house of multiple occupation landlords leaving the sector due to increased costs and regulation. It said UK students now account for 72% of its customers, compared to 60% a few years ago, which it said “reflects our success in retaining second- and third-year students who might have historically moved into the HMO sector.”
Joe Lister, chief executive of Unite Students, said: “The outlook for 2025 is encouraging with growing momentum, driven by increasing demand and a more supportive policy environment for international students.
“Additionally, private HMO landlords continue to leave the sector, creating a shortage of student housing. We are well-positioned to respond, with a robust development pipeline and new university joint-venture partnerships.”
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