Purpose-built student accommodation (PBSA) remains chronically undersupplied across the UK, but particularly in London. In Knight Frank’s latest Student Property Report, which we released last month, we estimated that there are an additional 95,000 student bed spaces in the planning pipeline – although not all of these will be delivered. Even so, this best-case figure of 95,000 PBSA units in the pipeline, delivery will still be dwarfed by recent and expected growth in student numbers. We anticipate that the number of full-time undergraduates in the UK’s higher education system is expected to grow by more than 250,000 between 2023 and 2030.
By Chris Benham, a Partner in the Town Planning team at Knight Frank
Because of this demand/supply imbalance, the NPPF requires planning authorities to plan for the needs of students. Despite this directive, local planning authorities are often resistant to new schemes – and sometimes disregard the areas of a development plan that acknowledge the positive role PBSA can play in the wider housing market. As a result, we must ensure we are offering something special to local authorities and the community when submitting a PBSA planning application, while also robustly demonstrating compliance with planning policy.
From our experience, there are a few key characteristics that are included in all successful planning applications – the first is based on local need. The most successful needs assessments think broadly about demographic and economic trends and set the scene for not only how many students there are in a catchment, but answer ‘why’ this is the case.
The emphasis must be on examining how student populations are changing – both in terms of the number of students requiring accommodation, but also their propensity to live in PBSA. Local level data to support this is key. Affordability constraints in the wider private rented sector means that the traditional areas in which students live are being re-drawn.
The best assessments use multiple sources of information to back up conclusions. This includes data from student surveys which demonstrate why students want PBSA over conventional housing stock, the size of local education institutions and their growth plans, as well as indicators of demand such as rental growth and occupancy rates. The GLA has its own methodology on how to establish need, but there are additional datasets to include that make a compelling case for PBSA.
Higher Education Institutions (HEIs) endorsement
In London specifically, the London Plan brought in a requirement for a nominations agreement from the point of occupation. This transferred the balance of power in commercial discussions about nominations agreements to HEIs and has led to local authorities asking for evidence of a nomination of stock (or a commitment to enter one) early in the planning stage.
We often see requests for HEIs to be present in pre-application meetings and requests to demonstrate HEIs are in contact with developers before design teams have even settled on the scale and quantum of a development. Where expectations cannot be met projects are delayed. Our advice is for developers to do their best to demonstrate a link to a HEI as early as possible. A letter of support at an early pre-application meeting is helpful, but engaging the HEI in the planning process as far as is commercially sensible is advisable.
Design plays a crucial role in persuading local authorities to look favourably on a PBSA scheme, however what constitutes good design remains subjective. There are no specific design standards in most local authorities, but design and planning officers certainly have ideas of what a successful PBSA scheme should deliver. The push for larger room sizes is not yet translating to a clear trend, with cluster beds hovering around the 12-13.5 sqm mark for most schemes.
What does seem to be becoming a trend is the provision of greater and better designed amenity spaces. Study space, ‘zoom rooms’, quiet spaces and communal areas all feature. Whilst this adds a cost and is potentially delivered at the expense of more rooms, student satisfaction, higher occupancy, improved room rates and stronger rebooking is the counterbalance.
Local authorities, communities, and funding partners expect developments to deliver social value. How this is delivered is open for discussion and could include the provision of space within the scheme for a specific community purpose, an occupier with a particularly social purpose with links to the local community, or perhaps some form of outreach programme to be delivered by the developer through the construction process.
The other aspect which is linked to social value is the contribution to a mixed and balanced community. This concept has no formal definition but typically relates to the balance of student accommodation to residential accommodation. We see this differently, however, and often advocate that a mixed-use scheme that offers community benefits in other ways and which generates employment opportunities through construction and operational phase can deliver against this objective.
Overall, PBSA development is becoming increasingly complex and requires a more hands-on approach from developers than ever before. That being said, seeking advice from a planning expert who has experience of guiding complex PBSA schemes through the planning system can ensure a scheme has the best chance of success. Indeed, following the characteristics has led to Knight Frank’s Planning team securing consent for over 3,000 PBSA beds across developments in London and other regional student cities.
The high expectations placed upon PBSA developments by local authorities, the communities they sit within, and the end users are increasing all the time. Those developers willing and able to keep evolving their product to meet these expectations will be the most successful as we enter the next stage of PBSA’s maturity.