I stayed in halls of residence when I went to university and had a brilliant time. Its a great way to make new friends, especially if you are moving to a city where you dont know anyone, though you mention possibly sharing a flat with a friend so I guess you do know people where you are going?
The cost of halls usually includes bills (mine did anyway) so you wont have to worry about that. Taking that into account I think it would work out cheaper than renting a flat. I can't remember what the halls I was in cost me, but I'm sure it was reasonable. You can get flats that are pretty cheap, but going by any I have seen, they are cheap for a reason...
Anyway, I would definately reccomend halls, even if you do know people where you are going. The social aspect is great; if it is your first time away from home its an easier introduction to being out in the big wide world, so to speak; if there are people staying there studying similar courses to you and you get stuck with your coursework theres sure to be someone who can help you out; the halls themselves will be maintained to a certain standard; no worries about bills, buying furniture or dodgy landlords trying to rip you off; etc etc...
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