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The Rise and Rise of Purpose Built Student Accommodation in the UK: Edinburgh
With four universities in the UK top 100 and one, the University of Edinburgh, in the top 20, it should come as no surprise that student numbers in Edinburgh have increased by 31% since 1999, with over 47,000 students now enrolled with a university. As the popularity of the city’s universities has grown, positive economic benefits have been felt by the universities themselves, local service economies, landlords and other associated businesses.As is common in other university towns and cities, the growth in student numbers has been faster than the corresponding growth in purpose built student accommodation (PBSA) to provide housing catering for the increased demand. Students are often driven towards less suitable, former ‘family housing’ that is now on the private rental market, as often the accommodation that can be supplied by universities does not meet modern standards, nor satisfy locational requirements. Adding to the problem, there is not enough privately provided purpose built accommodation to provide any alternative choice.As student numbers have grown across the UK it is becoming harder and harder for traditional institutions to provide accommodation beyond the first year of study. This has been the position for decades with it being very common for students to be provided with accommodation in their first year with no further provision in following years, fuelling the growth in student-let Housing in Multiple Occupation (HMO) in most university towns and cities – and the social and environmental problems that can arise with HMO concentrations. In Edinburgh, the intensification of HMOs in neighbourhoods close to the city centre (such as Marchmont and Southside) and along arterial routes (into areas such as Leith) has led to the issue becoming increasingly politicised, as the permanent component of these communities feel the pressures of their transient neighbours. Edinburgh City Council has attempted to address this through the adopted Edinburgh City Local Plan (Policy HOU 10), proactively encouraging privately operated PBSA to assist with freeing up former family housing.Under Policy HOU10 Proposals must be in appropriate locations – good access by public transport, walking or cycling, and in or adjacent to university campuses, these developments cannot result in an excessive concentration of student accommodation in one location - this marker is set at 30% of the student population. Using the newly launched BeDSPACE model, NLP estimated that there would be a need for 14,000 additional student bed spaces across the city in order to provide enough accommodation for all students currently residing in the private rented sector.In spite of this, and a policy presumption in favour of PBSA, large schemes are now increasingly being refused by the City Council for their lack of compliance with local planning policy. One recent scheme for 836 units was refused on the basis that there was already an intensification of student accommodation in this location, with 55% of residents in the area being identified as students, well in excess of the 30% limit set in policy. It was argued that if the planning application was granted the local population would increase from 55% to 62%.The appeal was allowed as the Reporter concluded that the objective of Policy HOU10 is to support PBSA near higher education locations and the majority of students already live in this location for this reason – the University of Edinburgh is the only university within a city centre location so the nearby housing will inevitably provide the focus for student accommodation. The Reporter considered that such developments are encouraged through Policy HOU10 because students needs can be met as far as possible in PBSA, which then decreases the widespread conversion and use of family housing stock and the need or students to travel if they are located on or adjacent to campuses. The Reporter stated that “The policy first encourages student housing to sites close to the university, while the 30% restriction would direct such developments to less sustainable locations, so a balance has to be struck”.Against the benefits of PBSA, the development would increase the student population to 62% in an area where there is already concern about high numbers of properties utilised for student accommodation. However it is argued that the loss of family homes which has had a negative impact on communities, will only improve as more PBSA is built. The appeal was allowed as the reporter accepted that “while the proposed scheme would result in a greater concentration of student accommodation in the locality, it would be in an area close to the university where student accommodation is already at a high level, it would be a self-contained scheme unrelated to the existing tenement stock and would not result in any further loss of family housing. With the ECLP encouraging the erection of more of this type of development, I conclude that the appeal scheme would not result in too high a concentration of student accommodation in the area.”The City of Edinburgh Council has recently sought to refine its approach to PBSA in order to ensure policy does not contradict what it is intended to do, increase PBSA. The emerging Edinburgh City Local Development Plan will shortly replace the Local Plan with Policy HOU8: Student Accommodation omitting the 30% threshold contained in its predecessor, HOU10 and non-statutory Supplementary Planning Guidance on Student Accommodation published in February 2016 acknowledges the positive impacts that such development can have.Local Authorities need to understand that when PBSA is provided by developers rarely can educational institutions compete with the quality and service that the private sector can offer, nor can they provide accommodation in sufficient quantity. There is room for both providers in most university towns and cities. Equally, many areas that have concentrations of HMOs exist for good reason, usually because of their proximity to campuses and the popularity of the very institutions that in some cases have a huge role in underpinning the local economy.The Edinburgh example is of course theoretical as students are no different to anyone else and like to live in traditional homes, most commonly in Edinburgh large flats, and many will always want this. However increasingly more students will move out willingly to PBSA as a modern alternative to traditional student homes. The important thing to recognise is that not all areas will return to family housing, it will take time, but with good viable PBSA as an alternative, HMO growth can be checked and controlled.Click to view Edinburgh BeDSPACE example.


The Student Accommodation Use Classes Order Predicament
On 25th February 2016 the Use Classes Order (1987) was amended in Wales to introduce a new C4 use class, which has been in place in England since April 2010. Use Class C4 covers the use of a dwelling house by not more than six residents as a House in Multiple Occupation (HMO)[1]. Prior to the introduction of this use class, landlords could convert a standard dwelling to a HMO of up to six people living together as a single household without the need to apply for planning permission. Now, this conversion will constitute a material change of use of the land from use class C3 (Dwelling House) to C4 (HMO) which Councils will be able to assess against their statutory development plan. Meanwhile, converting back to C3 from C4 does not require planning permission as it is considered permitted development.As a consequence of this amendment, Local Planning Authorities (LPAs) will possibly have more control over the number and location of HMOs within their area. LPAs would most probably argue that this is a positive given that a high concentration of HMOs can create transient communities as well as contribute to parking and waste problems (45% and 51% of students in Cardiff and Swansea respectively live within the private rented sector.) Other issues, perhaps more important, include valuable family housing being lost from the housing stock and converted into HMOs, making it increasingly difficult for first time buyers to access the housing market. It remains to be seen if Councils will refuse planning permission for HMOs going forward and if this will see more HMOs reverting back to family housing[2].This brings us on to the subject of purpose built student accommodation (PBSA). PBSA has become increasingly popular recently for developers and for students. The benefits for students 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. PBSA is proving to be a clear attraction for students and its recent proliferation has seen numerous students opting for PBSA in preference to HMOs. This is likely to lead to the traditional inner city homes that have hitherto provided the mainstay of student housing, potentially converting back to family homes, which may be no bad thing. Understandably, the relatively cheap cost of renting a room within a HMO will still hold some appeal to students outpriced by PBSA which implies that HMOs still have an important part to play in the supply of student accommodation.However, PBSA is not without its own planning complexities with regards to how schemes are considered by LPAs. Generally, PBSA is classed by LPAs as a Sui Generis use as it does not fall within any specific use class. NLP’s experience is that PBSA is evidently different to conventional residential housing (C3) and is arguably more akin to a hotel (C1) in its operation as it includes management personnel and on site facilities such as laundry, reception and common rooms[3], but the approach of dealing with PBSA applications differs dramatically from one LPA to another.However, we have also seen instances of LPAs requesting that applications for PBSA specify the use class as C2 (residential institutions), C3 (dwelling houses) or C4 (HMO), depending on the particular circumstances. Some LPAs argue that a PBSA comprising studio flats should be classified as C3 due to the fact that studios include their own kitchen and bathroom. On the other hand, some LPAs argue that PBSA comprising cluster flats of up to 6 people should be classified as C4.Uncertainty around the specification of a specific use class for PBSA has enormous implications for the sector,  especially if LPAs start requesting affordable housing contributions on PBSA applications that fall within Use Class C (even though the nature of the accommodation is quite clearly different to open market housing). Prominently, this would have an impact upon development viability. For example, Oxford City Council has an adopted policy which states that planning permission will only be granted for new student accommodation that includes 20 or more bedrooms if a financial contribution is secured towards delivering affordable housing elsewhere in Oxford[4]. (With the sum in Oxford amounting to £140 per sq m, a notional PBSA scheme of 5,000 sqm would need to pay £700,000 in financial contributions).Given the relatively recent boom in PBSA development, the correct approach with regards to the use class of PBSA is yet to be tested in a court of law and therefore the varying approaches of LPAs looks set to continue into the future. However, what is clear in the current market is that PBSA is a form of development that is becoming increasingly popular for students and developers alike and there are implications of this, not only on supply of student accommodation but also on the fabric of some areas with traditionally high concentrations of students. This could lead to a perceptible number reverting to family homes – without the need for planning permission, of course! [1] A HMO of more than six residents continues to be classed as Sui Generis.[2] Oxford City Council’s adopted Sites and Housing Plan considers that 20% of buildings in HMO use within a 200 metres’ length of street is likely to result in over concentration. Cardiff Council’s draft HMO SPG also uses the same threshold.[3] This is the approach taken by NLP on a site in Swansea for 750 student bedspaces comprising studio and cluster flats as well as communal and management areas.