A new breed of shark is out to sink its teeth into students, hoping to fleece the young and financially inexperienced of their student loans before they’ve even started term.
Are we talking about drug dealers, unscrupulous credit card companies, or maybe religious cults? No, it is City-backed investment companies that we should be worried about.
Hoping to offset their losses as the property market remains in the doldrums they are moving into the student accommodation market, throwing up new halls of residence as fast as possible.
Companies such as Unite, Liberty Living and Cosmopolitan Student Homes are making huge profits by charging rip-off rents – and scandalously, they have the full backing of some of Britain’s biggest universities.
With billboards that offer the prospect of “exciting urban living” with pictures of groups of deliriously happy and immaculately trendy students, these firms are fast replacing college-owned halls with their own.
Already Unite houses some 38,000 students in its accommodation.
In Liverpool, the company is offering tiny en-suite study bedrooms at “Grand Central” for £119 a week – which adds up to a whopping £4,988 for 42 weeks.
The maximum student loan for an 18 year old is currently just £3,564.
A similarly equipped room in a shared house nearby can be rented for just £55 a week.
Annie, a student nurse studying in the city, has just moved out of a hall of residence run by another company after three months.
“I terminated my contract early,” she told Socialist Worker. “I was paying £87 a week for a tiny room, so the company must have been raking in profits.
“But the building has real problems, including a broken front door lock, that the management seems to have no intention of fixing. The result is that people are constantly getting robbed, and worse.
“Yesterday the microwave caught fire. We’d already warned that it was faulty but again, nothing had been done.
“The whole thing is a rip-off. These companies are taking advantage of people who are leaving home for the first time, or those coming to Britain to study – people who don’t necessarily have the experience to find a better deal.”
Despite ludicrously high rents and a catalogue of failures, private halls are listed by most university student accommodation offices.
And many have a more direct link – meaning that halls run by private firms are given preferential status to students looking for somewhere to live.
On its company website – carefully stashed away from its student accommodation site – The Unite Group boasts that its student business housing is bucking the trend the rest of the market, and that its property portfolio will soon be worth over £2.5 billion.
In the first six months of this year Unite raked in profits of £3.5 million and its share prices has soared.
Meanwhile, according to the Sunday Times newspaper, Kay Brandeaux and Roger Boyland, the British couple behind Brandeaux Fund Management, which owns Liberty Living, recently paid £26 million for their new villa in Cologny, Switzerland.
You can bet the en-suite bathrooms there are several times bigger than the flats they rent to students in Britain.
But it is not only greedy private firms that are driving up the cost of student accommodation.
In 1993 the university of Liverpool charged students £1,800 per academic year to stay in its fully-catered Roscoe and Gladstone halls. Adjusted for inflation, that rent should be around £2,700 today.
But instead, college authorities are demanding £4,029.
“I think students need to start standing up for themselves,” says Annie. “In the past students organised rent strikes, and withheld their payments when universities raised their rents too high.
“Shouldn’t we start doing something like that again?”