‘Huge increases’ to student accommodation costs ahead of rent caps

Owners of purpose-built student accommodation have been accused of hiking prices ahead of new caps on rent increases coming into force next week.

Until now, purpose-built student accommodation has been exempt from legislation capping increases in designated pressure zones.

This is due to change on Thursday, when it formally comes under new legislation that will limit price increases to 4 per cent per annum.

The cost of private purpose-built student accommodation in Dublin in many cases has risen by between 10 and 15 per cent, with the most expensive rooms now costing up to €1,500 a month.

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Laura Beston, president of the Union of Students of Ireland (USI), said: "They knew this was coming down the line and we've seen huge increases in some instances."

She said the process began last year with a private student accommodation provider for DCU students raising prices by 27 per cent, while another private provider for NUI Galway students increased prices by 18 per cent.

Ms Beston said this was putting accommodation well out of the price range of most students. “Most accommodation is totally inaccessible and unaffordable.”

In addition, some third level institutions have been accused of hiking the cost of on-campus accommodation ahead of the introduction of the caps.

Highest

UCC has recorded some of the highest rent hikes, according to figures compiled the Irish Independent, with its prices jumping by between 10 and 11.5 per cent. The most expensive on-campus student accommodation for the academic year is in Dublin, where top prices range from €8,000 at Trinity to €11,000 at UCD.

Most colleges have said the need to increase costs was linked to refurbishment or the expense of providing utilities.

Ms Beston said it was vital that third level colleges ensure that on-campus accommodation is made available at cost-rental prices.

“They should not profit from it - it should be made available at the lowest price possible,” she said.

The Government has defended its record, stating that it is hitting its targets to increase the supply of student accommodation.

Minister of State at the Department of Education Mary Mitchell O’Connor said recently that some 6,691 purpose-built student spaces had been completed since the Government published a blueprint in July 2017.

Almost 6,000 further bed spaces are under construction, while permission has been granted for more than 8,000 other bed spaces.

“The National Student Accommodation strategy was designed to increase supply and so assist in moderating rental costs for students. As the figures show the strategy is working and we are on track to exceed the target set at the outset,” she said.

Boutique hotels

However, Ms Beston said the vast bulk of new private purpose-built accommodation in the capital times resembled expensive boutique hotel rooms .

“They are not building what students want. There are bowling alleys, cinema rooms and luxurious rooms, and they’re charging €200 a week or more.”

She also warned that there was every chance that new private purpose-built accommodation will revert to the private rental sector after a 10-year period.

Under section 50 reliefs contained in the 1999 Finance Act, property developers were allowed to build student properties in return for generous tax reliefs over a 10-year period.

There have been cases of private student-built accommodation moving onto the open market after a 10-year period in Waterford and Galway in recent years.