Blog | Student Housing

The evolution of student accommodation: A graduate’s view

During my five years at university I noticed a significant change in the provision of accommodation for students. In 2012, when I was looking for my first student digs, the private sector was providing half of all purpose-built student accommodation (PBSA). So, unlike generations before me, I quickly became more familiar with PBSA than university owned accommodation and the HMO sector.

However, I quickly realised it was more expensive to rent an ensuite bedroom with a shared kitchen and lounge facilities than a one bedroom flat. PBSA is typically 9% more expensive than university accommodation. This left me considering, what benefits does PBSA offer to justify these higher rents? The major ‘selling point’ at the time were free onsite gyms, however many of these went unused and I remember my friends joining gyms outside of their accommodation because the onsite gyms provided were inadequate, consisting of a couple treadmills and dumbbells. Compared to the customer focused approach today, these PBSA providers were not taking into consideration the real needs of students.

More student choice quality!

The transformation of the sector has been dramatic; ten years ago, student accommodation comprised of dated halls of residence and cramped and damp HMOs, where the main choice students had was between the location and the distance to university facilities.

By the time I joined university, the sector had just started to flourish and I saw the very earliest PBSA schemes, which although not perfect, offered students an alternative experience to HMOs. Today, students have even more choice with good quality accommodation featuring excellent amenities such as cinemas, steam rooms and properly equipped onsite gyms. As a result, students like me have increasingly chosen service and quality over convenience of location.

Those studying now have come to expect the high specification, services and amenities that private sector PBSA offers. The greater choice and enhanced living experiences have resulted in students demanding more from their landlords.

In my experience students will pay for well thought-out amenities. Students primarily want amenities under one roof, with costs included in their rent. These include social and entertainment spaces, a gym, comfortable study space (preferably away from the bedroom), and as always, students prefer private space (i.e. not shared rooms or bathrooms). This is why I saw many student friends opting for the private sector over university accommodation, as a large proportion of accommodation provided by my university still featured shared bathrooms and in some cases, even shared rooms (I can’t think of anything more uncomfortable), which is peculiar in today’s market!At the opposite end of the market studios can be isolating and detract from the social aspect of the student experience. Personally, I would never opt to live in a studio. In my opinion ensuite rooms in shared cluster flats with good amenities and service are the perfect middle ground.

HMO landlords that want to compete face the challenge of more difficult management and maintenance than PBSA; making it difficult for them to maintain a similar standard of quality. Although this may be seen as an existential challenge to HMOs, ultimately, it is a different market and attracts different customers. And as the cost of attending university grows, not all students will be able to pay for the added extras that come with premium PBSA. However, cost isn’t the only reason the HMO market remains strong; as a student I saw a lot of my friends preferring the HMO market due the social ‘glue’ created by living in a house.

Affordability

Indeed, affordability is one of the main reasons HMOs are popular today. Students are spending up to 65% of their student loan on rent. Some of my peers benefited from financial support from their parents and others weren’t as fortunate and racked up more student debt due to rents (which most of us have the pleasure of experiencing!).

Unaffordability is having an impact on demand for studios; they are becoming less popular with students due to the extremely high levels of pricing and the significant supply of them in recent years. It is no surprise to me that there are some empty rooms across the country, mostly because some providers haven’t considered what students want from their accommodation. This isn’t the case for all studios however, as those at the top end of the market which include premium service and amenities are performing well.

In response to the growing levels of unaffordability and mounting student debt, the National Union for Students (NUS) has set out an ambitious goal for 25% of all bed spaces to be provided at a maximum of 50% of the student loan, which currently sits at 13%. Putting my student hat on, I think this is excellent and a good start to reducing the social issues arising from unaffordability.

Market leaders

There are clear leaders in the market including the likes of Vita, Nido and IconInc, who are providing accommodation that students want to live in – i.e. well considered amenities. IconInc are a leading brand in the high quality PBSA market, and currently have two blocks in Leeds, one in Liverpool and will soon have one in Lincoln. When I went to their recent opening of the £25 million six-storey development in Leeds ‘The Glassworks,’ I was impressed with the all-inclusive facilities, including a gym with personal trainers, a sauna, steam room, cinema, study rooms, mega kitchen, free breakfast and glamping pods. This sets the benchmark for luxury student living. With luxury comes the price tag, but there is clear demand, with the development fully let.

Although standards were higher than accommodation in previous student generations, these developments were certainly not around when I became a student. It’s interesting seeing the changes in the market from a student perspective to working in the sector and it begs the question, what is next for the new build student accommodation era? My own view is that the affordability of student digs will eventually come more to the fore.


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