Call for a new approach on the affordability, regulation and cost of student accommodation

The report explains:

• how student accommodation has changed since previous generations of students were at university;
• how current regulations add cost without stopping the most pressing challenges; and
• how to make accommodation more responsive to the needs of students.

It calls for a new approach in three areas.

1. Affordability: As rent now takes up three-quarters (73%) of the maximum student loan on average, up from 58% just a few years ago, all institutions should adopt an affordability policy. Universities could take the lead in providing more low-cost accommodation, either by developing it themselves or partnering with the private sector.
2. Regulation: Councils charge private providers large sums for licensing but with no clear benefits to students: in Liverpool, the landlord licensing scheme (2017 to 2020) cost £2 million, yet it is thought no visits were made to the accommodation and no enforcement action was taken. Greater co-operation is needed between the Department for Education and the Ministry of Housing, Communities & Local Government.
3. Cost: Currently, half (49%) of accommodation providers do not involve students in their rent-setting. This needs to change. Moreover, VAT restrictions on the alternative use of student accommodation by non-students currently stop viable commercial use of student accommodation, such as subsidising student rents via summer tourists.

Sarah Jones, a consultant in student accommodation and a Partner in the real-estate firm Cushman & Wakefield, who co-authored the report, said:

‘Our report describes the big picture of the student accommodation sector and highlights just how much the sector has changed in response to rising student expectations, a bigger and more diverse student population and changing ownership structures.

‘In future, the sector will need to provide greater choice of accommodation and price points, but there are still significant barriers to offering those choices.’

Martin Blakey, the Chief Executive of the charity Unipol Student Homes and co-author of the report, said:

‘The debate about the importance of all accommodation providers in the education process has been spurred on by the Coronavirus pandemic and its dramatic effect on the student residential experience. This report supports this debate with clear, accurate and factual information free from industry spin.

‘The cost of student accommodation is a growing issue and can affect educational access for disadvantaged groups. The affordability of student accommodation must be shaped by the university sector and not just left to the private sector. All publicly-funded institutions should have an affordability policy to ensure they do not disengage from this issue.

‘The fastest and most efficient way of getting greater engagement and communication between private PBSA providers and educational institutions is to improve the current government-approved National Codes to provide more detailed and specific standards that revolve around a new mission statement for all members “to work together to the benefit of student tenants”.’

Nick Hillman, Director of HEPI, said:

‘The residential experience is a core part of the student experience. Student accommodation is much more important in the UK than in most other countries, as 80% of full-time students leave home to study.

‘This brings challenges for policymakers, institutions and students. Yet the current regulations are not fit for purpose, the availability of accommodation does not reflect demand and some students, including many of those who have to live at home, still suffer academically from their living arrangements.

‘It is vital we build a deeper and broader understanding of the student accommodation sector to improve this situation. Students’ living arrangements should be designed to help rather than hinder learning and the wider educational experience.’

NUS Vice President Higher Education, Hillary Gyebi-Ababio, said:

“We welcome many of the recommendations in this report – particularly those concerning the need to tackle the affordability crisis facing student renters, the need for reforms to boost students’ rights as tenants and the need for governments across the UK to greater understand the student housing sector and intervene.

“Outside Scotland, student tenants have been left without access to any safety net during the pandemic which has only further highlighted how we need an independent review of the student housing sector which places students at its centre. The UK Government’s planned Renters’ Reform Bill is a perfect opportunity to implement such a review in England alongside a range of other protections for all renters.”

HEPI’s other recent work on student accommodation includes:

• David Maguire and David Morris, Homeward Bound: Defining, understanding and aiding ‘commuter students’ (December 2018);
• William Whyte, Somewhere to live: Why British students study away from home – and why it matters (November 2019).