Students turn to payday loans to avoid substandard accommodation

Students in Wales are taking out payday loans for their accommodation so they can avoid living in poor quality house shares.

Welsh students are turning to payday loans as they become increasingly desperate to live in better conditions, according to the National Union of Students (NUS).

Property advisor at Cushman and Wakefield, David Feeney, described the debt as “abstract” to most students, many of whom already have significant debts for their tuition fees and living costs.

There are plans to build up to 3,500 new student rooms in Swansea and Cardiff. In 2017–18 alone about 1,700 will open in the Welsh capital, the majority of which will be studio apartments in high-rise flats in the city centre.

A studio apartment in the new Fusion development on Newport Road will cost £177.50 a week, owing largely to its location and facilities that include a gym and a cinema. This is in stark contrast to £50 a week for a room in a substandard student house.

Unfortunately, students in Wales aren't the only ones paying big bucks for often poor quality accommodation. Read our National Student Accommodation Survey to find out more about the living conditions across the UK.

Current student experiences

A spokesman for NUS Cymru said many students were unable to afford accommodation, and instead were having to live in properties with damp and sometimes rats. He explained that students just want “a decent house”.

Despite landlords having to comply with the government’s Rent Smart Wales initiative, and that accommodation is improving overall, there are still many rooms in terrible conditions. Students have been known to “couch surf” or rely on their parents’ money to avoid living in these places.

The NUS spokesman added:

Not insubstantial amounts of students are taking out credit cards and payday loans and getting into financial trouble over all sorts of things including accommodation.

There are the ones who have the money to look at these ones in Cardiff with gyms and cinemas, but there are many who are struggling to make ends meet and just need a home they can afford to live in and run.

However, money isn't just a concern for students looking for accommodation. It impacts the lives of students in many ways, according to our national student money survey.

What’s being done to tackle it?

Many more rooms need building to meet the growing demand from students, particularly those from overseas. Even with building plans in place, a further 5,000 rooms are needed in Cardiff.

Mr Feeney explained that many students who currently live in HMOs (houses of multiple occupation) may be willing to make a change. For this to happen, the price must be right and developers must take into account that students like living with groups of friends rather than in isolated flats.

Cardiff announced its plans to build new accommodation for up to 725 students at its Talybont campus, which will include larger living spaces and private dining areas. Wrexham Glyndwr University and Aberystwyth have both also promised significant investment in the construction of new student living spaces.

Mr Feeney added:

This generation are very aspirational, but there is a big disconnect between what is being charged and what they can afford.

How are the universities being affected?

Statistics collected by the BBC show that the number of students choosing Welsh universities has decreased. In 2011–12, 131,185 students enrolled at Welsh institutions, compared to 121,950 in 2015–16.

Aberystwyth, Bangor, Cardiff Metropolitan, Glyndwr, and the University of Wales Trinity St David have all seen their student numbers fall. Cardiff and Swansea, however, saw increases of 10% and 18% respectively.

Mr Feeney put the overall drop down to a race between universities to attract the best students, who since the huge increases in tuition fees, are now seeking a good experience as well as a high quality education.

If students are going to spend all this money – £9,000 a year in tuition fees – they think they must be able to get a job at the end of it, and also have a great time.

We are seeing real divisions in the market. The great quality universities that offer a niche are getting better, while the old polytechnics are struggling to react.

What is your opinion of the price and quality of your student accommodation? If you’re interested in what your fellow students think, check out our national accommodation survey.