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Greater Manchester’s Student Squeeze

Greater Manchester’s Student Squeeze

Max Kidd-Rossiter 09 Feb 2023
There has been an unprecedented demand for student accommodation in Greater Manchester since the Covid-19 pandemic, which culminated in students being unable to secure accommodation for the 2021/22 and 2022/23 academic years. This was well documented in the local press, with some students being asked to commute to their Manchester universities from Liverpool or Huddersfield[1]. In another instance, a university offered students a financial incentive to hand-back their university managed accommodation so that it could be offered to other students[2].
So, what has caused the imbalance of student accommodation in Greater Manchester?

Demand

Regionally, as well as nationally, there are more students enrolled at higher education [HE] providers than ever before[3]. Greater Manchester is home to the largest student population in the UK, outside of London. Between the 2014/15 and 2019/20 academic years, there was a gradual year-on-year increase of students attending the eight HE providers in the Greater Manchester region[4].  Over this five-year period, there was a growth of 8,885 students[5], from 96,300 in 2014/15 to 105,145 in 2019/20 (see Figure 1 below).  Then, in the 2020/21 academic year, there was a sharp increase of 11,520 students enrolled at HE providers in Greater Manchester – more growth than the previous five-years put together.  The data for the 2021/22 academic year was published in January 2023 and shows that student enrolments in Greater Manchester continued to climb at a higher rate than pre-pandemic levels.  
This growth meant that at the start of the 2021/22 academic year, there were 121,305 students enrolled at Greater Manchester’s HE providers. The city region’s four universities make up 99% of the enrolments (119,800). The University of Manchester has the most students enrolled (46,410), followed by Manchester Metropolitan University (36,980), The University of Salford (25,415), and The University of Bolton (10,995).
Figure 1 Students Enrolled at Greater Manchester HE Providers 2014/15 - 2021/22

Source: Lichfields analysis using HESA data (2015-2022)

The majority of HE students move into a term-time residence. Nationally, 52% of students live in university maintained property, private-sector halls, or other rented term-time accommodation. This increases to 55% for students attending HE providers in the North West of England[6]. This means that the growth of student enrolments for the 2020/21 academic year alone generated a demand for circa. 6,300 additional student bedspaces in Greater Manchester[7]. Across the 2020/21 and 2021/22 academic years together, enrolment growth generated a demand for approximately 9,000 additional student bedspaces.

Supply

It is clear from the measures employed by Greater Manchester’s HE providers to offer students accommodation for the 2021/22 academic year, that the supply of purpose built student accommodation [PBSA] has not managed to keep pace with the sharp rise in demand.
PBSA, whether university maintained or private, is typically the preferred accommodation choice for students because of its additional security, tailored facilities, social living spaces, and simplified letting arrangements. However, the lack of PBSA in Greater Manchester has left many students with no other option but to enter the mainstream rental market. There is now intense competition between working households and students for rental accommodation in Greater Manchester.  This is one of a number of a number of factors that has led to a ‘perfect storm’ for Greater Manchester’s rental market – with rents reported to have increased between 20%-40% across the city region over the past year. 
Despite the lack of supply, the emerging Places for Everyone Joint Development Plan [PfE] for nine of the Greater Manchester districts does not identify any specific allocations for PBSA. PfE acknowledges that Greater Manchester has one of the largest student concentrations in Europe, and supports the continued growth of the university sector (draft Policy JP-P 5). However, PfE draft Policy JP-H3 states that housing provision to accommodate specific groups, including students, will be dealt with through district local plans. 
The continued growth of the universities, in line with PfE draft Policy JP-P 5, will drive additional demand for student bedspaces in Greater Manchester. This could create a greater imbalance of student bedspaces in the short-to-medium-term, until the Districts’ Local Plans address student accommodation provision. In the interim, there is evidence of a need for PBSA development to address the imbalance.  Additional PBSA development can also help to free-up private rental stock by accommodating students that would otherwise be forced into the mainstream rental market.
Most Local Planning Authorities now require developers to demonstrate the need for PBSA. This is particularly pertinent to locations, such as Manchester, where several PBSA developments have recently been consented, or are currently under construction.

 

Bedspace: A robust evidence-led argument to support new PBSA

Lichfields’ product Bedspace[8] is an evidence-based solution to demonstrate the need for PBSA. By undertaking a quantitative analysis of current and past trends in student growth, and analysing it against the current supply pipeline and growth strategies of HE providers, Bedspace can identify the capacity for further PBSA in any defined location.
How Bedspace can help stakeholders address Greater Manchester’s student squeeze:
  • PBSA Developers – Bedspace can provide a robust evidence-led argument to support new PBSA development in a given university location in Greater Manchester. It can also be used as a tool to inform early investment decisions.
  • Local Planning Authorities – Bedspace can understand the student accommodation needs of the Greater Manchester districts and provide robust evidence to support policies and allocations in emerging development plans.
  • HE Providers – Bedspace can inform the expansion of the HE provider’s existing accommodation offer by understanding the mix of student accommodation in the area.
Please get in touch if you want to discuss Bedspace further.

[1] Manchester Met students offered £100 a week to live in Liverpool and Huddersfield as university hit by accommodation crisis

[2] Manchester University offer students £2,500 to live off campus after 'unprecedented' accommodation demands

[3] HESA Data (2022)

[4] The University of Manchester, Manchester Metropolitan University, The University of Salford, The University of Bolton, Royal Northern College of Music, Futureworks, Nazarene Theological College, and Luther King House Educational Trust

[5] Lichfields analysis based on HESA data 2014-2021

[6] HESA Data (2021)

[7] Lichfields analysis based on HESA data (2021)

[8] https://lichfields.uk/content/products/bedspace

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Bedspace: a framework used to assess the need for Purpose Built Student Accommodation
Most university locations across the UK have seen an influx of Purpose Built Student Accommodation (PBSA). In response many Local Planning Authorities now require developers to demonstrate the need for this development.

How can Bedspace help?

Bedspace strengthens the justification for PBSA by: 
  • Presenting evidence led quantitative analysis of current and past trends in student growth and student accommodation preferences;

  • Analysing the supply pipeline as well as the potential future capacity for further PBSA, cognisant of both past trends and of university growth ambitions;

  • Detailing the potential economic impacts generated during construction of the development and after its completion; and

  • Presenting this assessment in a planning application document which has proven track record with Local Authorities.

Who is it for?

  • PBSA Developers: Demonstrating the need for PBSA in a given University location or informing early investment decisions;

  • Local Planning Authorities: Understanding student accommodation needs in their area and providing robust evidence for emerging development plans; and

  • Higher Education Institutions: Understanding the mix of student accommodation in their area and informing expansion of their accommodation offer.
Bedspace features two examples of student base data in local authorities, one of which is Oxford City Council (OCC). The need to deliver general housing, whilst ensuring student accommodation is provided for during the plan period, is acutely relevant to OCC, and thus presented an interesting case study.
It has been identified that in the catchment area of Oxford City there are 32,295 students, split between its two universities; Oxford University (19,265) and Oxford Brookes University (13,035)[1]. If the city’s student population was to increase in line with past growth rates over the last 10 years, there could be an additional 965 students by 2025. Unsurprisingly, our evidence also shows that in Oxford, university halls of residence are the preferred accommodation type (over 50%). With 25% of students living in private rented accommodation, private sector halls represent only a very small fraction of the share (3%).
The Council’s recently adopted Local Plan (June 2020) recognises that the success of Oxford’s economy is shaped by the presence of its two universities.
The Local Plan identifies that provision of good quality, well managed student accommodation will continue to be required in Oxford. However, this type of land use often competes with sites for general housing. The Local Plan therefore places restrictions on the locations suitable for student accommodation and limits its occupancy to students at one of the two universities on academic courses of over a year.
OCC’s approach has been to include a threshold cap for both universities within the Local Plan. This restricts the number of students permitted to live outside the university provided accommodation. Furthermore, in the OCC area, the growth, redevelopment or refurbishment of education floorspace is linked to student accommodation provision (i.e. the provision of accommodation must be in step with the expansion of student places).
The above, coupled with the requirement to provide an affordable housing contribution on student accommodation schemes (25 or more students/10 or more self-contained units), as well as payment of CIL (which is applicable to both education and student accommodation floorspace in the OCC area), presents a challenging situation for PBSA.
However, the unique nature of OCC’s threshold strategy for the universities is long established. The Local Plan Inspector noted in its Examination Report (May 2020[2]) that “…..the threshold system has been tried and tested in Oxford in previous plans and is a workable means of balancing the housing needs of the very large student population against the city’s many other housing needs and land uses. It is also a system that, subject to the specific threshold numbers, has been developed by consensus.”
Given the importance of the universities within the area, supply for student accommodation needs to be met to ensure growth of these important institutions can continue. The Local Plan’s aim is to balance support for the two universities while continuing the prioritisation of general housing. This difficult balancing act is applicable to local authorities across the UK.
Clearly PBSA is one of many competing land uses that Local Authorities have to contend with when seeking to meet its housing requirements. The shortage of appropriate sites within the city is a factor in land supply for housing. For example, Oxford has a rich history with large swathes of the city core within or adjacent to Conservation Areas, many listed buildings and other heritage assets. This is common across several of the UK’s university towns and cities. By nature, student accommodation would ideally be located in areas accessible to the city centre as opposed to outer suburbs, which may be more suitable for general housing provision. If students living within private rented accommodation could be housed in PBSA, private housing could be released back into the general rental market.
The National Planning Practice Guidance (NPPG[3]) confirms that all student accommodation can in principle count towards contributing to an authority’s housing land supply based on:
  • the amount of accommodation that new student housing releases in the wider housing market (by allowing existing properties to return to general residential use); and / or

  • the extent to which it allows general market housing to remain in such use, rather than being converted for use as student accommodation.
PBSA development could go some way to assist with these challenges, allowing institutions to focus investment in teaching facilities and the “student experience” rather than provision of accommodation.
New PBSA development presents a fresh opportunity in terms of the way it can be used, which will be increasingly important in an uncertain market (See Arwel Evans' blog). This flexibility could help with other competing land uses, not just for general housing sites. For example, PBSA space can be rented on a short-term basis to visitors outside of term time, helping to address a shortage of visitor accommodation.
Bedspace can help navigate some of the current uncertainty in the market and provide a robust evidence led argument, helping to guide investment decisions to where PBSA is most needed.
Please do not hesitate to get in touch to discuss further.

[1] HESA Student Record 2018/19 (figures do not sum due to rounding)[2] https://www.oxford.gov.uk/downloads/file/7288/inspectors_report_-_oxford_local_plan_2036[3] https://www.gov.uk/guidance/housing-supply-and-delivery Paragraph: 034 Reference ID: 68-034-20190722

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