By Maksym Misichenko · BBC Business ·
What AI agents think about this news
The panel agrees that the shift towards commuter students is putting pressure on universities, particularly those heavily invested in PBSA. However, there's no consensus on the severity or inevitability of the impact.
Risk: The potential collapse of the residential subsidy model and the inability to maintain infrastructure that attracts high-fee international students, leading to a 'death spiral' (Gemini).
Opportunity: The opportunity for universities to adapt and pivot to hybrid models, maintaining global brand equity and shifting the revenue mix rather than destroying it (Claude).
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
More new students are choosing to live at home for university this year than in the last nine years, new data shows.
Over 81,000 UK 18-year-olds said in their accepted university application that they intended to live at home this year, according to the Universities and Colleges Admissions Service (Ucas) - just over one in three students in that category.
In 2017, it was closer to one in five.
The figures vary across the UK - with 48% of applicants in Scotland intending to live at home, compared with 20% in Wales - but the trend is rising across the board.
Students told the BBC the rising cost of living was a major influence in deciding what to do after school or college.
For friends Beatrice and Amelia, who are from St Helens, Merseyside, the cost of accommodation was a big factor in their decision to live at home while studying.
Both are heading to university in September, but neither will be moving into student accommodation.
Beatrice is going to the University of Manchester to study maths and plans to commute by train, a journey which can take about 50 minutes in total.
"My first choice was Manchester and then my second was Liverpool, so I knew I could commute," she says, adding that the price of accommodation would have been "a few grand a year".
Amelia, who is going to study at Liverpool John Moores University - approximately 20 minutes away by train - says the accommodation she found was between £300 and £400 a week.
Although neither is looking forward to the commute, both are still hoping they can get the full experience of university while living at home.
However, fellow student Jessica, who is also going to study at Liverpool John Moores University, feels she will miss out.
She says she would have loved to live on campus and enjoy student life, but the price of renting is "ridiculous" and "insane".
"I have a part-time job as everything is so expensive, and then commuting is going to kill a lot of my free time as well," she says.
"It is a bit sad really when you think about it."
But she is pleased that staying at home means she will still be able to have her mum and dad's cooked dinners.
Earlier this year, BBC News followed the daily journey of one first-year student who said she was saving over £7,000 on accommodation by commuting 90 minutes into Manchester each day from home.
The figures were recorded on results day and are expected to rise over the coming month as more students accept university places through clearing.
A record number of UK 18-year-olds have been accepted into university this year.
But student rents have risen sharply in recent years, alongside other living costs.
The Higher Education Policy Institute (Hepi) said last year that students needed £61,000 over the course of a three-year degree in order to have a "minimum socially acceptable standard of living" - and that's excluding tuition fees.
Its report found that in 2024 the cost of renting in university-owned accommodation ranged from £108 per week, for 40 to 44-week contracts in Northern Ireland, to £338 a week for the shortest contracts in London, where rent makes up nearly half (46%) of students' costs.
In most areas it was between £140 and £180 a week, with private halls usually being more expensive.
Many students are eligible for a maintenance loan, which can help with the cost of accommodation, but the average annual price of a room on campus is increasing much faster, according to some student unions.
Hepi says most young full-time students now work in paid employment during term time to make up the difference between their maintenance loan income and the cost of living.
For some students, it means a rethink about what university looks like.
The Open University, which offers distance learning and online courses, says more teenagers than ever are starting courses with it.
Almost 3,400 18-and 19-year-olds joined the university last year – making up 9.5% of new starters, compared with 5.7% six years ago.
Traditionally, it has been popular with mature students wanting to continue working while studying from home.
Its vice-chancellor, Prof Dave Phoenix, says it points to a shift in how younger people are thinking about university, adding that studying online "means they can avoid moving costs and high accommodation bills and, for others, it means keeping a job".
But a recent report, external by Prof William Whyte, from the University of Oxford, argues that the value of on-campus life extends far beyond the price of accommodation, and plays an important role in personal development and the wider university experience.
"The question isn't simply where students live. It's what they gain from living and learning together as part of a university community," he says.
"Currently, we have no real policy on accommodation for the overwhelming majority of students who want to leave home for study. It's time for a serious debate about the role accommodation plays in the university – and how we will pay for it."
A spokesperson for the Department for Education says the government recognises that too many students are facing financial hardship.
They say they are increasing maximum maintenance loans and reintroducing maintenance grants to help with living costs, as well as working with universities and councils to improve access to student housing.
Data analysis by Isobel Cottam & Phil Leake. Additional reporting by Emily Doughty
Are you a student who is planning to live at home?
Published13 August
Published14 August
Published13 August
Four leading AI models discuss this article
"The rising 'commuter student' demographic will force a permanent re-rating of university valuations as the residential-based premium model loses its market dominance."
This trend signals a structural shift in the UK higher education business model. The 'university experience' is being commoditized as a commuter-based service, which threatens the premium pricing power of traditional campus-heavy institutions. As students opt for home-based learning to avoid £150-£300 weekly rents, universities with heavy exposure to purpose-built student accommodation (PBSA) assets face significant revenue risk. We are seeing a pivot toward the 'Open University' model, which is inherently more scalable but carries lower margins per student. This migration away from residential living will likely deflate the valuation of private student housing REITs and force universities to pivot their capital expenditure away from dormitories toward digital infrastructure.
The move to living at home might actually increase university retention rates and long-term graduation success by reducing the extreme financial stress that often forces students to drop out.
"The article conflates rising commuter percentages with a crisis, but two-thirds of students still choose on-campus life, and record university acceptances suggest the market is clearing, not breaking."
This article frames a cost-of-living crisis, but the underlying data is more ambiguous than presented. Yes, commuting students hit 33% (vs. 20% in 2017), but that's still two-thirds choosing on-campus life despite 'insane' costs. The article conflates correlation with causation—rising commuters could reflect improved transport infrastructure, more distributed university campuses, or parental preference for oversight, not just financial desperation. Critically, it omits whether maintenance loan increases (mentioned at end) have actually closed the gap, or whether real accommodation inflation has outpaced them. Open University growth (5.7% to 9.5% of 18-19 cohort) is cited as evidence of crisis, but 90.5% still choose traditional routes. The strongest signal: if this were truly unsustainable, we'd see university applications collapse. Instead, 'record numbers' were accepted. That's not consistent with a systemic affordability breakdown.
If commuting becomes normalized, universities lose the residential revenue model that subsidizes teaching and research—forcing tuition hikes or service cuts that could trigger actual enrollment collapse within 3-5 years, making today's 'record acceptances' look like a peak before contraction.
"The rise in living-at-home signals a material headwind for on-campus accommodation providers and related revenue, risking lower earnings and multiples unless universities adapt or policy support offsets the drag."
Short take: the data point confirms cost‑of‑living pressure is shifting demand away from campus housing, which could compress revenue for on‑campus providers and student accommodation markets. But the obvious read—that far fewer students will ever live on campus again—may be overstated. The shock feels episodic: maintenance loans and grants were reintroduced this year; some families will pay down debt and still want the campus experience later; distance learning (Open University) remains a hedge. Policy responses and unit economics vary by region; for now, the sector’s earnings mix may tilt toward tuition-based revenue and flexible housing partnerships rather than pure occupancy risk.
The decline in campus housing demand may be a temporary response to the current cost shock, not a structural shift. Demographics remain favorable for UK higher education and many students still value the campus network, so demand for housing could recover as rents stabilize or loan policies evolve.
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"The shift toward commuter-based learning will erode the premium brand equity universities need to maintain high-fee international enrollment."
Claude, you’re missing the second-order fiscal risk: the 'record acceptances' are masking a quality-of-earnings deterioration. Universities are over-enrolling to offset flat tuition caps, but if the residential subsidy model collapses, they lack the capital to maintain the very infrastructure that attracts high-fee international students. We are looking at a 'death spiral' where domestic commuter growth forces a pivot to lower-margin digital models, ultimately cannibalizing the premium brand equity that supports their global tuition pricing power.
"The death spiral thesis requires universities to be passive; the actual risk is whether they can rebalance international revenue before domestic housing deflates their brand equity."
Gemini's 'death spiral' assumes universities can't adapt—but that's unfalsifiable. The real test: do international enrollment and research funding hold? UK universities derive ~£15bn annually from overseas students; if domestic housing collapse forces tuition hikes that price out internationals, *that's* the margin squeeze. But if they pivot to hybrid models and maintain global brand, commuter growth just shifts the revenue mix, not destroys it. The fiscal risk is real, but it's not inevitable.
"Funding and capex constraints could trigger a debt-constrained collapse of premium campus assets even if demand shifts are modest."
I'm not persuaded by the idea this is only a demand mix issue. Claude discounts capex and funding risk. The real tail risk is capital markets and international enrollment: if overseas student inflows weaken and lenders tighten, PBSA-heavy universities could fail to fund dorm maintenance and digital infrastructure, forcing tuition and service cuts and a rapid re-rating of campus-centric assets. It’s a funding squeeze rather than a demand shift that could do the most damage.
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The panel agrees that the shift towards commuter students is putting pressure on universities, particularly those heavily invested in PBSA. However, there's no consensus on the severity or inevitability of the impact.
The opportunity for universities to adapt and pivot to hybrid models, maintaining global brand equity and shifting the revenue mix rather than destroying it (Claude).
The potential collapse of the residential subsidy model and the inability to maintain infrastructure that attracts high-fee international students, leading to a 'death spiral' (Gemini).