Student accommodation: little room for manoeuvre

A frequent problem with higher education policy discussions is how tempting it is to use one’s own university days as a prism through which to view almost anything HE-related.

Take the way in which demands for 100 per cent face-to-face lectures became the be-all and end-all of a post-Covid bounce-back, when the reality in 2023 is very different, pandemic or no pandemic.

For many of us, the grisliest trip down memory lane is to recall student accommodation “in our day”.

You will, perhaps, have horror stories of your own – mine dates from a first year in a catered hall of residence, when I resided in the last room on a long corridor. My misfortune was to be next to the shared loos, which meant people coming and going at all hours and, from time to time after a heavy night out, not quite making it – which meant waking up to a pool of sick outside my door.

No doubt this is all out of date. Students are far more sensible in their drinking habits than used to be the case, and the loo shared by a dozen or more in a corridor might also be a thing of the past.

But if we imagine that how and where students live is no longer an issue of concern, then that appraisal too needs careful review.

Student accommodation has become a huge pressure point for universities and, as we explore in our cover story, availability is now a deciding factor in many institutions’ strategic plans for growth.

One of the UK’s leading analysts of higher education, Mark Corver, the founder of dataHE (which, as of the start of this year, is a THE-owned business), explained to me the issues at play.

Until recently, universities were growing in a demand-led way, which – being easy to forecast – worked well for both institutions and developers, who have provided much of the purpose-built student accommodation of the past decade or two.

As a result, investment in such accommodation was low risk, while financing was easy and cheap. And if demand outstripped supply, the private landlord market was there to step in.

But, as Corver explained to me, all of these dynamics have now changed.

Higher education is switching to supply-led growth, which is harder to forecast, and deteriorating economics have led to supply-led contraction in some cases.

At the same time, construction and financing costs have soared, while the numbers of students that universities are being driven to recruit most aggressively (international and one-year postgraduate) are more liable to fluctuations, adding risk for developers. There is a limit to how much rents can rise to cover this uncertainty.

This has constrained the supply of new purpose-built student accommodation, while tax and regulation changes are making the small landlord sector far less attractive.

The result is that, since accommodation provision is not nearly as flexible as teaching capacity, where students will live has become a major factor in universities’ ability to plan their size and shape.

The lack of margin for error has led to some awful headlines for universities – of students housed in a different city altogether from the one where they are studying, for example.

This is a story not of an annoying commute to campus, but a young person who will almost certainly be left isolated, disillusioned and perhaps feeling they are a victim of mis-selling.

Given concerns about student mental health, such a scenario is not just inconvenient but unethical.

And the problems do not end there. An increase in the number of international students coming to the UK with dependants adds further complexity: if accommodation for individuals is under pressure, then appropriate housing for students with families poses an even greater challenge in many cases.

This can be exacerbated by other factors too. For example, international students might be advised to wait until they have their visas before they start to look into accommodation, which often leaves them with slim pickings as they come late to the market relative to their UK counterparts.

What our analysis shows is how complex these issues are – but also that the dynamics are outside of universities’ direct control in many cases.

Debates about student numbers rarely focus on such practicalities as whether there is anywhere for them to lay their heads.

But accommodation affects everything, from universities’ financial health to their students’ mental health, and as such is a much more complicated issue than it was back in the day.

john.gill@timeshighereducation.com