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Purpose-built student accommodation – time to take stock
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. Impact on student recruitment 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 1st 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. Impact on student accommodation sector 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. Planning permission for temporary change 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 takeaway message 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. Contact Lichfields to discuss any planning queries that you may have.   [1] Coronavirus (COVID-19) Update from the Vice-Chancellor (University of Cambridge - May 2020)[2] Impact of the Covid-19 pandemic on university finances (London Economics – April 2020)[3] Serviced apartments use extension sought for Cardiff scheme (Insider Media Wales - May 2020)  

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Creating sustainable communities – the future of Edinburgh’s student housing policy
Edinburgh City Council is looking to require Purpose Build Student Housing Schemes to also provide mainstream and market housing on site and require proposed developments to be built for and managed by a university or college. Edinburgh is one of the UK’s top student cities, with four Universities and three further education colleges. The University of Edinburgh is a member of the Russell Group and is ranked within the top 20 universities in the UK, and Heriot-Watt, Queen Margaret and Edinburgh Napier all feature in the top 100. In Edinburgh, around 80,000 students were enrolled in further or higher education in 2017, one of the UK's highest student concentrations. Compared to other UK cities, Edinburgh has the highest proportion of non-UK students and the highest proportion of EU students.  Over the past 20 years, full time students enrolled in the City’s four universities have risen significantly. With student numbers increasing there is added pressure on existing housing stock.       Lichfields is preparing a case study of Edinburgh using our BedSpace toolkit.  This looks at the potential for the City to accommodate additional Purpose Build Student Accommodation. The BedSpace model draws together information relating to housing capacity, demand and market signals. If you would like a copy of this case study please contact Nicola Woodward.  If you would like this analysis carried out for other university cities in the UK please also get in touch.   Edinburgh City Council produced non statutory guidance on student housing in 2016. The guidance aims to set out how the Council will encourage the further provision of purpose-built student accommodation and balance the needs of the existing community and the need for general housing.  New policy proposals for student housing in Edinburgh The City Council are preparing a new Local Development Plan (City Plan 2030) and have published their Choices 2030 document (essentially their Main Issues Report) for consultation until end April 2020.  Here under the banner of Creating Sustainable Neighbourhoods (Choice 10) the City Council consider future policy in respect of student accommodation. The Choices document highlights Student housing as one of a number of development types that are being built at the expense of sustainable communities and states that the Council wants sites coming forward for such uses to also deliver new housing.  To this end the Council are proposing the introduction of the following requirements for new purpose-built student accommodation (PBSA): to be located on a direct walking, cycling, or public transport route by to an intended university or college, not just be generally in an appropriate location as is the requirement of the existing policy HOU10; to deliver market and affordable housing within the development; to be built for and managed by one of Edinburgh’s universities or colleges; and, to deliver a maximum of 10 % studio flats. In addition to this policy change, the Council proposes in their Choices Document that unallocated sites over 0.25 hectares coming forward for student housing will require at least 50% of the site to be for market and affordable housing development. There are 2 elements of this proposed policy change that are particularly concerning. The first is the requirement to deliver affordable housing alongside PBSA in locations that meet the needs of students, but not necessarily of affordable housing tenants; and the second, is the deliberate precluding of the private market from the provision of student accommodation in the city.  These are explored below. PBSA and affordable housing – a unhappy mix It is unclear why the locational requirements of affordable housing is thought to be the same and harmonious with those of students by the City Council. Students want to be near universities, nightlife and leisure facilities. Households in social rented housing are often families or older people who will ultimately have different housing requirements.  Being close to their social networks, being located in areas with easy access to convenience retailing where their shopping needs can be met and near facilities such as doctors, playparks and schools are far more important to them.  These are rarely found in city centre locations close to universities.  In addition, there are the potentially conflicting life styles between residents and students, which quite often result in complaints. Delivering PBSA to meet growing demand The proposed 50 % requirement for housing on unallocated sites, if adopted, will have a significant impact on the student housing sector in Edinburgh, as will the requirement for the accommodation to be built for and managed by a university or college.  It is unclear why the City Council are proposing to preclude private providers of PBSA from the city by requiring new accommodation to be managed by a university or college.  The PBSA market is well established in the UK and the quality of the product is extremely high. Indeed, very often it is of a significantly higher quality than that provided by universities and the management of the facilities is first class. This is particularly important for non-European students who have extremely high expectations in terms the quality of accommodation they will accept. This proposed policy is potentially very damaging for the prosperity of the universities and colleges of the city and their attractiveness to foreign students.  It will also have a devastating effect on the PBSA market in the city if private providers are excluded.  Our research shows the potential demand for a further 5,170 bedspaces in the city.  If these are not provided in purpose-built units, the impact on the housing stock in the city centre will continue to be felt.  Many cities have for the past 10 years or more been embracing the development of purpose-built student accommodation to remove the pressure on popular residential areas from homes in multiple occupation (HMOs).  Edinburgh is struggling to meet its mainstream housing needs and it would seem logical to put in place polices that allow the return of traditional housing stock to the mainstream market by providing more, not less, bespoke accommodation for students. Edinburgh is well reported as a ‘hotspot’ for investment in PBSA as demand continues to outstrip supply[1] and this policy change, as proposed, will not adequately address the issue.  A consequence of the proposed policy, whether intended or otherwise, is that speculative PBSA developments will drop off considerably with the ability to progress such schemes all but precluded. So what for the future? Student housing providers with an interest in Edinburgh should take note and make representations to the City Council on their emerging Local Development Plan.  Representations to this Choices document can be made until 30 April 2020 and it is expected at the end of the summer the proposed plan will be published ahead of its examination and adoption.  With a number of Local Development Plans now under review, it will be interesting to see if other local authorities follow Edinburgh’s lead and propose to introduce a similar approach to student housing. If you are interested in student housing development in Edinburgh, or elsewhere in Scotland, please get in touch with Lichfields. Arabella Stewart-LesliePlannerarabella.stewart-leslie@lichfields.uk Nicola WoodwardSenior Directornicola.woodward@lichfields.uk [1] Knight Frank Global Student Property 2019 Report

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