Planning matters

On 21 May 2020 the Vice-Chancellor of Cambridge University made a statement^[1] outlining its response to the COVID-19 pandemic and how the university is likely to function in the future. Professor Toope explained that the University would not be able to deliver all face-to-face lectures for the academic year 2020/21 and that these are likely to be replaced by online lectures. However, it is acknowledged that lectures are only one component of a successful university experience and that other elements such as small-group teaching, supervisions and practicals are expected to continue in person but taking account of social distancing requirements. Other UK universities have made similar statements.

There is a real possibility that students will not wish to attend university in 2020/21 due to the fear on missing out on the traditional university experience, that the alternative provision will not provide the same quality of learning, concern about living away from home or because of public health concerns. Students may defer until 2021/22 or suspend plans on a longer-term basis. Analysis by London Economics[2] estimates that as many as 110,000 students in Britain could delay going to university in 2020/21 if classes remain online, causing a “severe” financial hit to academic institutions. Total decline in international students alone is expected to be 120,755 across UK universities. With higher fees paid by international students this could have significant financial impacts in the short term.

If 1^st year students are not registering for courses and returning students are not attending in person then this has the potential to have huge consequences on towns and cities that depend on students to ensure the vitality and viability of its communities. If learning is going to be online then the need for student accommodation as well as other supporting facilities is reduced.

The reduced number of students registering and number of existing students deciding to study from home via online classes is likely to have a significant impact on the student accommodation sector in the short term. This includes student accommodation owned by the institutions, private housing stock as well as private purpose-built student accommodation.

Purpose-built student accommodation has seen a boom recently with schemes coming forward in most university towns and cities. Purpose-built student accommodation has become increasingly popular for students. The benefits are clear: often, a better standard of living, on-site facilities as well as increased security and the benefit of not having to deal directly with landlords/agents. I discussed this in a previous blog.

Purpose-built student accommodation schemes that are currently under construction for occupation by the class of 2020/21 as well as existing operational buildings may no longer be in a position to attract the number of students (especially international students) initially anticipated and planned for due to the reduced number of students attending in a post COVID-19 world. Unsurprisingly, this creates a headache for the developer as the return on investment anticipated will not be realised in the short term. Clearly this is not a sustainable position and therefore it will be necessary to review whether the asset can be used for another purpose in the interim so that some income can be achieved, otherwise there is a risk that the financial asset becomes a burden.

Many Section 106 agreements or planning conditions restrict purpose-built student accommodation to students on full academic years, some even to specific institutions. Now is the time to seek agreement from the Local Planning Authority to permit use by students from other educational institutions, such as language colleges or the like who have short-term needs for accommodation but struggle to place students, this will further add to the resilience of the stock along alongside considering temporary changes of use.

The circumstances we find ourselves in currently are not normal and there is, in our opinion a need for pragmatism and flexibility from local planning authorities in terms of allowing purpose-built student accommodation buildings to be used for an alternative use temporarily until student numbers recover. From our experience some authorities already take a pragmatic view on temporary uses and acknowledge that it is sensible to allow buildings being completed in the middle of an academic year to be occupied by non-students until the start of the new academic year. It is already common practice for purpose-built student accommodation blocks to function as apart-hotel accommodation outside of term time catering for peak tourism demand. Lichfields has been successful in securing this flexibility on a number of schemes across the country.

The format and configuration of purpose-built student accommodation range from studio rooms with a bathroom (and sometimes kitchen) as well as communal areas to bedrooms in a cluster flat with shared communal kitchens, bathrooms and living space. This appears to point towards potential suitable alternative uses such as hotel or hostel (use class C1), short term private rented accommodation (use class C3) or a combination of these uses such as aparthotels / serviced accommodation. In addition, there could well be a scenario where part of the building continues to be used for student accommodation and part for the alternative use. This will depend on how the building functions internally and the anticipated number of students.

Residential space standards will apply (in England) and therefore a robust case will need to be put forward to argue for some deviation. A building with communal space, including outside amenity space could mitigate for smaller rooms and the fact that the permission is temporary should find support with pragmatic Local Planning Authorities.

We note that in Cardiff, Fusion Students have recently applied[3] to continue using up to 401 rooms within its Zenith scheme as serviced apartments (Use Class C1) instead of student accommodation. They had previously been successful in securing permission to use the building in this way for a period of 12 months. Fusion note that this approach is being taken on other sites throughout England and Wales. In this instance the non-students are able to use the communal spaces and facilities together with the students. It will be important to consider how this will work in practice.

The purpose-built student accommodation market is likely to be significantly affected by COVID-19 in the short term and therefore it is important to review contingency options for schemes that are impacted and to open dialogue with the local planning authority as soon as possible.

Lichfields is well placed to negotiate onerous planning restrictions on use, Section 106 clauses or planning conditions as well as making the case robustly for temporary changes of use to support the purpose-built student accommodation recovery from COVID-19.