University College London (UCL) has generated more than £30m in profit from student housing over the last three years, while the average weekly rent has risen by nearly 18%.
Data obtained under the Freedom of Information Act reveals the scale of the profitability of UCL’s housing operation amidst ongoing student action against high rent at university halls across London, as 150 students at the university begin rent strike action.
Figures show the university generated more than £100m in revenue from its halls of residence over the last three financial years, boasting a healthy year-on-year growth of 5.78%, while net profit rose by 41.70%.
Gross profit in 2015/16 – deemed by UCL to be taken before money is allocated towards capital investment – was £15.56m, while net profit – after capital investment – fell from £12.07m in 2014/15 to £10.97m.
Meanwhile an analysis of UCL’s accommodation portfolio, based on figures provided by the university, showed the average rent rose over this same period by 17.92%, with an 11.35% hike between 2014/15 and 2015/16 alone.
The average weekly rent UCL charged for a room during 2015/16 was £190.85, a substantial increase from £161.85 three years previously.
Key Stats Between 2013/14 – 2015/16:
For the third year running, UCL students have initiated rent strike action against the university, in a bid to bring down the rent.
The university offered in July to make an additional £350,000 available this year to fund bursaries for students in need of financial support, rising to £500,000 in 2017/18, as well as a rent freeze for 2016/17, with reductions for some rooms, valued at £1m.
A spokesperson from UCL CTR said: “We do consider these concessions victories for UCL Cut the Rent, however we do not believe it to be enough in the context of the unaffordability of UCL accommodation and the poor condition of many of the halls.
“We have plans to earn further cuts are concessions using a variety of tactics; a possible rent strike, giving us more leverage with UCL management.
“Many students we have heard from experiencing maintenance issues are understandably upset and angry about this.”
After information pertaining to UCL’s housing operation was mistakenly made public in March, the university was criticised for forcing a student journalist to sign an agreement to hand back the documents or face “various sanctions” including “dismissal without notice and potential exposure to court proceedings”.
The documents, accidentally made public through a staff member’s Microsoft Outlook calendar, contained various financial forecasts including that of a housing surplus running into millions of pounds.
Shelly Asquith, National Union of Students’ (NUS) vice president for welfare, called for universities to “take the crisis in student accommodation seriously.”
She said: “High rents and profit-making is pricing many students out of education. We want to see institutions take a strategic approach to rent setting, with proper consultation with students’ unions.
“We believe in fair rent structures, where, as a minimum, 25% of all bed spaces are charged at a rate of 50% of the maximum student loan, to ensure access for working class students.”
A spokesperson for UCL insisted the university is a not-for-profit organisation, and that “all rents paid at UCL remain within the accommodation budget”.
While they conceded that the past three years have yielded surpluses, the university does expect to run an overall deficit in the ten-year period between 2009/10 and 2019/20.
They continued: “In recent years there have been deficits in 2010/2011 and 2012/2013, and we expect deficits over the next three years due to major projects including £33m being invested into the refurbishment of Astor College, alongside plans to refurbish Ramsay Hall at a cost of £43m starting within the next two years.
“Income generated by UCL accommodations does not get funnelled into other sectors of university expenditures, as all of its surpluses are reinvested into accommodation.
“UCL has managed to maintain rents at a below-market level despite increasing financial pressures, with student rents across the whole of the UK increasing by 48.4% from 2009/2010 to 2015/2016. UCL rents are consistently lower than those of the private sector and other London based HEIs when comparing like-for-like accommodation.”