As outlined in Rebecca White’s
latest blog, student numbers are on the rise and housing requirements are rapidly rising alongside. Despite growing acknowledgement of this fact however, student housing remains a contentious issue with many – and understandably so.
Let’s face it – when we think of student housing, our first thoughts are most likely of messy flats, late night parties and strewn pizza boxes. Not exactly appealing! So why then is purpose built student accommodation (PBSA) good for a local area?
Firstly- new housing requires construction. Direct jobs are created through on-site workers, coupled with indirect jobs supported in the supply of materials and additional spend generated by construction workers in local shops and services. This can help to reduce unemployment in a local area: there are more than 24,900 Job Seeker’s Allowance (JSA) claimants in the UK currently seeking work in construction trades in November 2015 (accounting for 3.8% of all those claiming JSA).
[1] Once a development is up and running, additional jobs are also typically created in the management and security of student accommodation buildings, as well as cleaning, maintenance and in some instances on-site catering.
Secondly - students spend. Be it on rent, IT, books, coffee, kettles, duvets, handbags, baked beans, alcohol or Domino’s pizza (other brands are available), students will find a way to spend their student loans, allowances and work incomes. As the majority of students have limited or no access to a car, a high proportion of this spend tends to be retained in the local area, often supporting the establishment of new shops, services and leisure facilities in the immediate surrounding vicinity. It can also support the creation of a night-time economy - with student housing predominantly focussed around city centres, additional activity in the area after 9 to 5 office hours can support new leisure facilities and improve the safety of cities after dark, by increasing local footfall.
On average, the most recent
Student Income and Expenditure Survey published by BIS, estimated that full-time students spent £6,705 per year in the 2011/12 academic year and part-time students £11,534 on living costs alone. This level of spending, including expenditure on food and drink, personal items, leisure activities, household goods and travel, can support the creation of new jobs in a local area, driven by additional demand for goods and services.
Universities UK’s 2015 report on the
Economic Role of UK Universities also found that nearly 20% of the £73 billion output generated by the higher education sector as a whole in 2011/12 was dependent on the expenditure of students from outside the EU. Taking into account the report’s estimate that every £1 million of university output generates a further £1.35 million elsewhere in the economy, this suggests that total spend by non-EU students supports c.£19.7 billion in output for the wider UK economy- a proportion of which will be captured within university towns and cities.
Thirdly, the development of new student housing – whilst not directly generating Council Tax income – can create additional income for local authorities in England via New Homes Bonus payments. The payments, first introduced in 2010, match for a six year period the increase in potential Council Tax generated from new homes – whether or not the residents of the homes are liable to pay full Council Tax rates. Payments are not ring-fenced and therefore local authorities can use the income in the most beneficial way to support their needs.
Finally, the development of additional PBSA can take pressures off the local private rental market, providing a suitable alternative for students. This, in turn, can help to address rising house prices for local communities, driven by high demand in ‘student areas’. Local Council Tax revenues can also increase as a result of housing being released back into the mainstream market.
In addition to the above, the development of PBSA is widely recognised as playing a key role in attracting and accommodating higher numbers of students attending the universities in any one town or city. The creation of high quality accommodation can also contribute to the enjoyment of living in a particular location, presenting a key opportunity to support higher levels of graduate retention.
So whilst the development of PBSA may initially seem unnecessary or unappealing, the wider benefits that students can bring - including jobs, additional spend, new shops and facilities, local authority revenue, reducing pressures on private rental values and potentially improving local skills retention – can be significant for a local area.
NLP’s
BeDSPACE model provides a detailed analysis of needs, requirements and these positive impacts, demonstrating the beneficial consequences of increasing student accommodation numbers at site/local authority/combined authority/wider levels. For more information on the BeDSPACE model, why not read our new
BeDPSPACE brochure, which includes an example of the economic benefits that students bring.
