REAL ESTATE - Unite, which develops and manages student accommodation in the UK, has become embroiled in a row over student debt after extending contract terms.

The firm is to extend mandatory contract terms for students in its Birmingham property The Heights from 41 to 51 weeks. Spokeswoman Amanda Williams said the move was in line with contracts at its other properties but opposing student groups say it’s “unreasonable”.

The firm, which counts Dutch pension fund Stichting Pensioenfonds ABP among its major shareholders, denied the impact of extending the rental period significantly beyond the 38-week academic year would be to drive already struggling students further into debt.

ABP does not comment on listed companies. But Unite public affairs director Tabitha Birchall said: “We do have a progressive reputation and we hope our shareholders will trust us.”

Including a deposit, annual rent for The Heights under the new scheme will be £4643.75 (€6,827.23) per student – 33% higher than the average £3,500 student loan. But Birchall claimed recent increases in state funding would stabilise student debt, and cited Unite-sponsored research among 1,000 students nationwide indicating that 85% get help from their parents and 40% work part-time.

The developer claims it is responding to market demand largely from overseas and postgraduate students for year-round accommodation. It did not provide figures to substantiate the claim but Birchall said these groups made up “around a third” of The Heights’ student population.

The remaining two-thirds presumably benefit from what the firm describes as “the real student experience”.

“Going to university is about more than studying,” said Birchall. “We’re selling them an independent life away from home, meeting new people and making new friends.”

The National Union of Students (NUS) has expressed its reservations over high prices charged by private landlords in the student accommodation sector. Rents at The Heights are already at the top end of the student market in the area, averaging £89.80, compared with £57.45 for standard campus accommodation and £40 for a room in a rented house, according to Aston Students Guild.

“But do the others have broadband?” asked Birchall. “Students have a choice. They could go to another landlord.”