uk universities - accommodation costs survey 2009-2010

7/29/2019 UK Universities - Accommodation Costs Survey 2009-2010

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Accommodation

Costs Survey2009/10


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Acknowledgements

We would like to extend our grateful thanks to the institutions and private providers who took

part in our online survey, at the very busiest time of the year for accommodation offices. In

particular we would like to thank those who took additional time to carry out a pilot survey and

give us very comprehensive feedback.

These institutions were:

Sheffield Hallam University

Southampton Solent University

University of Leeds

University of Liverpool

Our thanks also go to a number of individuals who took time to comment on the survey

design, drafts of the report, and who provided advice and expertise in a number of areas:

Martin Blakey, Chief Executive, Unipol Student Homes

Malcolm Brown, Loughborough University

Karen Burke, Accommodation Services Manager, Sheffield Hallam University

Claire Callender, Professor of Higher Education, Birkbeck College

Bryan Carroll, Assistant Director Estates and Facilities, Southampton Solent University

Mark Grayling, General Manager, Nottingham Trent Students Union

Debbie Grant, Loughborough University

Dennis Hopper, Director of Residential and Commercial Services, University of Leeds

Ian Humphreys, Liverpool Student Homes

Paddy Jackman, Director of Commercial Services, Imperial College London

Jovan Luzajic, Universities UK

Ed Naylor, Student Accommodation Manager, Liverpool John Moores University

Julie Rugg, Senior Research Fellow, University of York

Ed Sparkes, Vice President (Housing and Community), University of Birmingham Guild of

Students

Roland Shanks, Senior Housing Adviser, University of London Housing Services

Mark Swales, Deputy Director Estates and Facilities, Sheffield Hallam University

Brian Welsh, Head of Operational Strategy, Liberty Living

Ben Whittaker, Vice President (Welfare), NUS

We would like to thank Martin Rushall for his thorough editing of this report.

At NUS, special thanks go to Stephanie Neave for her support throughout the project.

Sarah Wayman Scott Blakeway

NUS Unipol Student Homes


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Contents

Acknowledgements 2

Contents 3

Foreword 5

Executive summary 7

Profile of the sector 7

The cost of accommodation 7

Length of contract 8

Additional costs 8

Regional variation on costs 8

Reasons for rising costs 8The type of accommodation provided 9

Recommendations 10

Strategic development and planning 10Student support 10Transparency 10Sustainability 11

Background 13

The evolution of accommodation provision in higher education 13Accommodation in further education 13Where students live 13

The cost of accommodation 15

Purpose-built accommodation: rising prices 16

Weekly rents 17

Length of contract 17

Headline rent: what is included and what is not 18Additional costs 18

Control of accommodation in institutions 20

Changes to the cost of living 21

Affordable rent 22

Provision and rent: variation across regions and

institutions 23

Regional variation 23

Rents by institution 24Partnership arrangements with third-party suppliers 25

Purpose-built accommodation and the PRS: comparisons by city 27


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The changing profile of accommodation 34

Types of purpose-built accommodation currently provided 34

Specialist housing 36

The balance between institutional and private providers 37

Planned expansion figures 38

Other significant developments shaping the product 38

Are students getting what they want out of the market? 40

What do students want, and what are they getting? 40

Value for money 40

Quality 41

A false market? 41

Are students staying at home more? 42

Are more students choosing off-street properties? 42

Looking to the future 44

Overview 44

Purpose-built accommodation 44

Nomination agreements 45

Low-cost alternatives 45

Short-term accommodation 46

Data tables 47

Table 1: Average weekly rent by category of accommodation 47

Table 2: Average weekly rent by region 48

Table 3: Number of bedspaces by category of accommodation 49

Table 4: Number of bedspaces by region 50

Table 5: Average length of contract by category of accommodation 51

Table 6: Average length of contract by region 52

Table 7: Average deposit 53

Table 8: Rent inclusion by category of room 54Table 9: Rent inclusion base numbers 54

About the survey 55

Methodology 55

Alterations 55

Definitions 57

Comparisons 57

Calculations used 57

Abbreviations used 59

Schedule of respondents 60

Schedule of accreditation scheme operators 61


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Foreword

This is the latest NUS/Unipol Accommodation Costs Survey looking at rents charged in student

accommodation complexes (more generally known as "halls of residence") by both institutions

and the private sector.

Accommodation is a major factor in influencing the student experience. In the CUBO

"Enhancing the Student Experience" Report 2008, accommodation cost was valued as having

the third highest importance in living elements ranging above learning support and

employability.i Both cost and quality are important to students and their education

institutions. The same survey, however, showed a significant gap between importance and

satisfaction in accommodation quality: 78% of students were satisfied on quality but only 52%

of students were satisfied with the value of their accommodation.

Against this background, many accommodation providers gave us information as part of this

survey. Our thanks go to them for their help and co-operation which enables us to put thisdata in the public arena.

These are changing times for student accommodation. Private providers were caught in the

2008 credit crunch storm which was associated with falling property prices. Education

institutions themselves are cutting back on their budgets following cuts announced by the

Government over the next three years. In this context this report balances some positive

developments and raises a number of concerns.

The central concern is that affordability is becoming an increasing issue for poorer (or even

not-so-poor) students seeking to live away from home. Rents are rising quickly, in both real

and percentage terms, and the range of accommodation on offer from institutions is falling.

On the up side, rising rents have been accompanied by a transformation over the last decade

in the quality of accommodation on offer and much of the accommodation covered here has

had a significant effect on driving standards up across the private sector generally.

The question now is how high standards and rents go? There is no reason why richer students

should not have access to self-contained penthouse-type apartments but, clearly, they are not

for everyone. Understandably, as employment prospects become less certain and student

debt increases, students and their parents become more cautious about what to rent and how

much it costs. In the post-Lehman world we are all more cautious about taking on debt to be

paid for by some unspecified highly-paid job later.

It would be a mistake for new investors to be attracted to build more high-cost

accommodation on the basis that rents always rise. The challenge for future development will

be to provide a wider range of new accommodation within a lower-price banding.

In the last survey we were concerned about the development of more complex rental

structures, often to mask real cost. This survey shows that rental structures have simplified,

although they have done so because of the ability to include services within a rising headline

rent. Under this system, transparency has improved and recent benchmarking of standards

within the sector (either undertaken internally or through the Government-approved UUK and

ANUK/Unipol Codes) has kept both physical and management standards high.


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Students are seen as demanding customers and student accommodation is a very specific

niche market within the property world with high levels of servicing. Let us hope that students

are as demanding when they leave student accommodation and can act as drivers in the rest

of the private sector where a high-quality housing option is needed to offset the increasingly

distant prospect for many young people of moving into owner-occupation.

This report highlights the important role that student accommodation plays for both home and

international students who move away from home to study and how accommodation must be

seen as an integral part of the academic and social life of most of our major education

institutions. It is access to the totality of this learning experience that makes the UK higher

educational experience unique.

Our thanks go to Sarah Wayman, Scott Blakeway and Stephanie Neave for writing this report

and managing this project.

Ben Whittaker Martin Blakey

Vice President (Welfare) Chief ExecutiveNUS Unipol Student Homes


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Executive summary

The profile of the sector

Accommodation in this survey falls into three broad categories:

provided by the institutions themselves in their own buildings provided by others but via an arrangement made through an institution, referred to in

this document as a nomination agreement or

provided directly by an external private supplier, described in this report as a privateprovider

Institutionally-owned and managed housing still makes up the vast majority of purpose-built

accommodation. In the survey for 2009-10, 78.0% of purpose-built provision fell into this

category. A further 12.1% fell under various institutionally-linked nomination agreements and

9.9% was provided and directly let by private suppliers.

A wider data set of information is available from the suppliers of the UUK and ANUK/Unipol

Codes of Practice which have wide coverage in the sector. Here, 69% of bedspaces are

directly provided by institutional suppliers with the remaining 31% being provided by private

suppliers.

The cost of accommodation

The latest survey shows that the average cost of a room was 92.90 in 2008-09, rising to

98.99 in 2009-10. The actual increase in cost on the previous survey conducted in 2006-07

is 21.9%. This represents a real increase of 13.0% above inflation.ii

The actual increase for private accommodation was the largest at 29.5%: rent rose from 79iii

in 2006-07 to 102.28 in 2009-10. The average rent in institutional accommodation in 2009-

10 was 98.43, an actual increase of 20.3% from the 2006-07 survey. Across the same

period, the cost of accommodation provided through a nomination agreement grew by a

similar amount (20.4%).

On average rent per week, the most expensive room type was a double studio flat provided by

a private supplier and the cheapest was institutionally provided single self-catered

accommodation.

Average rents ranged in this survey from 49.00 per week up to 220.06 per week.

Rent which includes other services has become more common than it was in the period

covered by the last survey, particularly amongst private providers (see page 17).

From the 2009-10 data, 95.8% of all respondents included energy in their costs, 81.5%

included internet and 68.4% included insurance. Other additions reported were other utilities,

gym membership, free car parking and bus passes.


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Length of contract

The average length of contract has remained essentially the same at 39.6 weeks for

institutional accommodation. Based on the average price of a room, the annual rent a student

could expect to pay would be around 3,892.62 for the 2009-10 academic year.

For the same year, the contract length in nomination agreement accommodation averages at

nearly 43 weeks (42.9). Private providers have the longest average contract length at 44.6

weeks.

On the basis of these figures, the annual rents in accommodation provided through a

nomination agreement and a private provider for 2009-10 are 4,284.35 and 4,560.02

respectively.

Additional costs

There has been a significant drop in the percentage of suppliers charging a deposit from 79%

in 2006-07 (undifferentiated) to 57% of institutions and 62% of private providers.

Private providers deposits are covered by the Deposit Protection legislation and abide by the

timescales required of the regulations for returning deposits (about 4 weeks). Educational

institutions who are outside of the scheme returned their deposits at an average time of 4.8

weeks, although some institutions took as long as 16 weeks.

Regional variation on costs

Predictably, London remains the area with the most expensive rents averaging 125.34 a

week across all accommodation in 2009-10. The region with the cheapest rents is Northern

Irelandiv with an average rent of 64.17.

Reasons for rising costs

There are several reasons for rents continuing to rise well in excess of inflation:

the refurbishment of older stock newer student accommodation being associated with ever higher standards of amenity

and service

newer buildings tending to be expensive both to manage and to maintain the increase in the provision of ensuite rooms and studio flats the phasing-out of shared cluster flats with shared bathrooms in favour of ensuite

provision

Additionally, how institutions and other providers set their rents can be highly complex and

may be influenced by other factors, including demand, staffing, subsidising of certain rooms

and differential rents for factors such as room size.


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The type of accommodation provided

Self-catered accommodationv with ensuite facilities has now overtaken single self-catered

provision as the most common room type, accounting for 47.8% of bedspaces in the 2009-10

survey. Broken down, it represents 40.4% of institutional accommodation, 75.5% of rooms

offered through nomination arrangements and 71.2% of privately provided accommodation.

Single self-catered continues to be a common room type, and, with substantially cheaper

rents, remains an integral fixture of student accommodation provision.

Catered accommodation has continued to decline steadily but slowly over time. However it

may have reached a plateau. It accounts for around 17.7% of institutional accommodation

caught by the latest survey, broadly in line with the figure for the previous survey (17.3%).

Studio flats have continued to grow in number, but at a much slower rate than ensuite

accommodation. It accounts for 2% of accommodation overall. The majority of this growth is

in privately supplied accommodation. Indications from the sector are that this type of

accommodation will continue to be developed, though the number of students who will be able

to afford it is in question.

Provision of accommodation suitable for disabled students was high, at 95.7% of institutions

and 86.2% of private suppliers, with newer builds capable of ready conversion when needed.

The availability of accommodation for students with families is much lower less than a third

(32.3%) of institutions and less than a fifth (17.2%) of private suppliers had any such

provision. However, this provision is concentrated in a small number of institutions, which

may indicate that the need is being met by education providers with a particular studentprofile.


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Recommendations

Strategic development and planning

1. Affordability and choice should be reflected in the development and management ofstudent accommodation provided by institutions or for them through agreements, and arange of rents should be maintained.

2. The dangers of constantly upgrading accommodation to the point where all rents fallwithin high rental bands should be acknowledged. There should be a good range of

accommodation type and cost available to students, allowing for provision of specialist as

well as low-cost housing. As a rule of thumb, 25% of all rents charged by (or through)

the institution should fall within the bottom quartile of the institution's rent structure.

3. Institutions and private providers should work with students and students unions toassess the housing needs of their students periodically, and regular satisfaction surveys

should be undertaken (ideally annually) and the information they generate fed into a

strategic assessment.

4. Institutions and private providers should ensure that student representatives areinvolved in, or consulted on, future developments in accommodation available, including

rent-setting, nomination agreements and refurbishments.

5. Institutions should be aware of their wider obligations to maintain and protect housingstandards outside their immediate provision by actively supporting accreditation and

promoting its benefits to their students and staff.

Student support

6. Institutions should consider current levels of student support within their costings forrents in order to ensure that students who are more dependent on loans and grants are

not priced out of accommodation.

7. Institutions should consider accommodation type, cost and location when carrying outimpact assessments under equality legislation.

8. The relationship between housing costs, poverty and educational choice is a complex oneand further work should be undertaken to explore what support should be available and

how this should be administered.

Transparency

9. The costs of student accommodation should be simple and made easy to understand.Contractual and cost obligations should be clearly spelt out to students in advance of

them making decisions about what to rent. It is particularly important that good quality

and transparent information is available when online booking and renting systems are

used.


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10. Booking fees taken in advance of forming a tenancy should relate specifically to theadditional cost of administration incurred by entering and then withdrawing from the

allocation system. Booking fees should not be seen as any form of cancellation charge or

payment where no specific room has been reserved.

11. Both the UUK and ANUK/Unipol Codes of Practice now have a four-week period withinwhich a student must receive their deposit back or be given clear reasons for the deposit

being withheld. This timeframe mirrors that set down in legislation for students renting

outside an institution on an assured shorthold tenancy. No institution should exceed this

limit for any reason and students are entitled to get their money back quickly.

12. Those administering the Codes of Practice should closely and specifically monitor theperformance of those who have agreed to adhere to these standards and should identify

in their annual reports any member who falls short of professional standards in this

regard.

Sustainability

13. Sustainability issues are of growing importance. Despite Energy Performance Certificatesnot being legally required for students renting individual rooms in a complex, all students

should have access to this information in the form of, at least, an EPC being displayed

prominently in each entry lobby to the building and details being available on the web for

students to see prior to renting.

14. Whilst charging energy inclusively within the rent reflects student preferences for aninclusive cost, every effort should be made by accommodation providers to give students

information on how much energy their flat is using plus further information to enablethem to compare their energy usage with an average use. Incentives should be

developed to encourage energy saving


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Background

The evolution of accommodation provision in higher education

Student accommodation in the UK has evolved over centuries, from as early as the twelfth

century in Oxford and Cambridge colleges through to the present day. It now houses nearly

half a million students.

Changes since the introduction of non-institutionally owned or managed accommodation in the

early 1990s are of particular note; between 1988 and 1998 student numbers increased by an

average of 138% a year.vi This mass expansion in student numbers, as well as other factors,

accelerated the erosion of the traditional halls of residence and the paternalistic lines on which

they were drawn. Consequently, accommodation began to develop to house higher numbers

of students at lower cost. Nonetheless, institutions were poorly positioned to match bedspace

provision and student numbers continued to grow. This expansion was compounded by the

internationalisation of higher education between 1998 and 2008 international studentnumbers increased by around 60%.vii

The result was a growing default reliance on local housing stock to meet the extra demand. A

solution for bridging the gap in bedspaces emerged as private suppliers major commercial

property development and management companies together with smaller numbers of

charitable housing organisations, entered the market in the 1990s. By the early part of that

decade, HE funding councils were actively encouraging universities to explore PFI

arrangements to supplement and upgrade their accommodation provision, or to make it

financially sustainable.viii

Commercial investment in student accommodation brought with it the provision of new

services and choices, including ensuite bedrooms, internet access, and gym facilities.

Although popular, the enhanced product and add-on services entailed a major hike in costs,

the affordability of which is in serious doubt for many students.

Accommodation in further education

Accommodation for higher education institutions makes up the vast majority of the sector.

However, there are also around 50 further education colleges around the country which

provide accommodation. The rest do not and the vast majority of FE students live at home.Around 1,900 bedspaces are covered by the ANUK/Unipol Code for Large Developments.

FECs providing accommodation tend to be small, specialist colleges, and the level of provision

is consequently on a smaller scale than in many higher education institutions (HEIs).

However, as distinctions between higher and further education continue to blur, this may be an

area of growth for student accommodation.

Where students live

Student accommodation continues to house a large proportion of students, 22% of full-timestudents according to the latest data. This represents a slight decrease on previous years.

The largest proportion of students (35%) currently live in the PRS with friends. Financially,


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living with parents or relatives is an increasingly attractive option. The figure currently stands

at 23%. Smaller numbers:

rent on their own or with a partner (10%) own a property (10%) or live in a house owned by their parents (1%)ix

Most institutional bedspaces are filled by first-year full-time undergraduates, but this type of

accommodation is also an important service for postgraduate and international students.


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The cost of accommodation

Purpose-built accommodation: rising prices

The provision surveyed falls into three broad categories accommodation:

provided by the institutions themselves in their own buildings provided by others but via an arrangement made through an institution, referred to in

this document as a nomination agreement

provided directly by an external private supplierRent in purpose-built accommodation continues to rise. Between the previous NUS/Unipol

Accommodation Costs Survey in 2006-07 and 2009-10 data, there has been a 21.9% actual

increase in average rents. Taking inflation into account, this is a real increase of 13.0% over

the last three academic years.

The average rent increased from 81.18 per week in 2006-07 to 92.90 in 2008-09 and to

98.99 in 2009-10.

Whilst we are still seeing rents increasing, however the rate of this growth appears to be

slowing. Rents between 2008-09 and 2009-10 increased by 2% above inflation (6.6% actual

increase), compared to 5% for the previous year.

Broken down by type of supplier, increase in rents was highest in accommodation provided by

external private suppliers with a 29.5% actual increase from 79 per week in 2006-07 to

102.28 in 2009-10. The average rent in institutional accommodation in 2009-10 was 98.43,an actual increase of 20.3% from the 2006-07 survey. Across the same period, the cost of

accommodation provided through a nomination agreement grew by a similar amount (20.4%),

averaging 99.93.

There are several reasons for rents continuing to rise well in excess of inflation:

the refurbishment of older stock newer student accommodation being associated with ever higher standards of amenity

and service

newer buildings tending to be expensive both to manage and to maintain

the increase in the provision of more expensive ensuite rooms and studio flats and thephasing-out of shared cluster flats with shared bathrooms

many suppliers charging rents inclusive of internet and energy costs, which themselvesare subject to fluctuation.

Added to this, how institutions and other providers set their rents can be highly complex and

may be influenced by other factors. These include demand, staffing, subsidising of certain

rooms and differential rent levels for factors such as room and bed size.

On the face of it the increases in rent for purpose-built accommodation are relatively modest,

but in the context of the economic downturn they are significant. The early indications on rent

levels for 2010-11 are that increases in real terms will continue to be a feature of the market

at a time when student funding is static and support from parents, themselves under economic


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pressure, is falling away. Private investment and development are also anticipated to continue

in this sector.

Comparison with the PRS serves to emphasise the resilience of the purpose-built market.

Since the onset of the recession in 2008, prices have substantially dropped in the PRS. As of

December 2009, rents for flats and houses in the private sector were 3% lower than in

December 2008, as recessionary forces created a renters market.x These forces included:

oversupply in the market landlords looking to remain competitive increasingly cost-conscious tenants prepared to shop around current policy drivers to move students away from living in the private rented sector.xi

By contrast, purpose-built accommodation providers appear to be relatively inured against

these market shifts, and demand for purpose-built accommodation public and private

remains strong as student numbers stay buoyant. This is particularly worthy of remark in the

context of the current policy drivers to shift student living out of converted off-streetproperties through tighter planning restrictions in key student areas.xii .

This is not to say, however, that private suppliers, and to some extent the institutions

themselves, are immune to the general economic downturn in the property market.

Revaluation of assets has placed a much greater emphasis on the revenue performance of

student accommodation rather than on equity appreciation. There is certainly pressure from

lenders on private sector providers to improve revenue. Within the educational sector there is

encouragement within institutions themselves to ensure that student accommodation budgets

not only break even but return a surplus to the core institutional budget. This is certain to

increase as institutions' funding from central government is reduced and this is likely to fuelrent increases over the next two years.

The continuous rises in student rents do beg the questions "Can rents go on rising in the

foreseeable future and Will students and their parents continue to be able to meet these

costs?" Elsewhere in this report it is suggested that these real year-on-year increases are

beginning to meet some market resistance from consumers and students, particularly in

higher-cost areas such as London. Here, students are shopping around to find the cheapest

deal. This trend is resulting in increased voids in the higher-priced provision.

Weekly rents

As Figure 1 below illustrates, the average weekly rent for a self-catered single room provided

by an institution increased by 14.3% since the last survey (for full definitions of each room

category, see page 55). The parallel increase for the product as offered by a private provider

is 20.5%. For ensuite rooms the most common category in this survey institutional rent

rose by 18.2% over the same period, as compared to a 30.6% increase set by private

providers.


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Figure 1: Average weekly rent by room type, and change since 2006-07

Average weekly rent by room type

Institutional 2006-07 ()2008-09

(0.00)

2009-10

(0.00)

Actual

increase /decrease

2006-07 to

2009-10

Real

increase /

decrease(linked to

RPI)

2006-07 to

2009-10

Self catering

single69 74.68 78.84 +14.3 +5.9

Self catering

ensuite86 95.88 101.64 +18.2 +9.5

Studio flat

single

Studio flatdouble

110118.50

127.63

121.80130.47

136.93

132.31 +20.3 +11.4

Full-board

single105 109.89 114.29 +8.9 +0.9

Full-board

ensuite128 135.49 146.73 +14.6 +6.2

Part-board

single90 101.78 105.94 +17.7 +9.1

Part-board

ensuite120 113.54 118.38 -1.3 -8.6

Houses76 110.03 108.91

+43.3%+32.77%

Flats82 119.81 126.12 +53.8% +42.50%

Nomination

Self-catering

single77 76.40 84.02 +9.1 +1.1

Self-catering

ensuite86 95.64 103.37 +20.2 +11.4

Studio flat

single- 130.67 147.74 - -

Studio flat

double- 137.17 179.25 - -

Private

supplier

Self-catering

single71 76.07 85.57 +20.5 +11.7

Self-catering

ensuite80 100.29 104.50 +30.6 +21.0

Studio flat

single

Studio flat

double

114121.83

142.26127.61

128.45

143.92133.19 =16.8 +8.3

Studio flats are another category of room that has seen considerable increases in rents during

the past three years. Over that period, rents increased by 20.3% for institutions and by

16.8% for private providers.


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Catered hall rents have grown overall, though at a slower rate than other in categories, whilst

part-board ensuite has actually decreased in cost.

Length of contract

When looking at rent levels, it is important to assess not just weekly rent, but length of

contract and additional costs levied by the accommodation provider. Only then can the total

cost of a room be accurately assessed and even then, drawing direct comparisons about this

information is difficult.

Variation occurs by category of accommodation: while a full-board ensuite room is rented for

an average of 36 weeks, a student could expect to rent a flat for 46 weeks (see Table 5)

Overall, however, the average length of contract for institutional accommodation has

essentially remained the same as in 2006-07 (39.3), at 39.6 weeks. Taking the average price

of a room, the annual rent a student could expect to pay would be around 3,892.62 for the

2009-10 academic year.

The contract length in nomination agreement accommodation averaged at nearly 43 weeks

(42.9), whilst private providers have the longest average contract length at just over 44 weeks

(44.6). On this basis, the annual rents in accommodation provided through a nomination

agreement and a private provider are 4,284.35 and 4,560.02 respectively.

Headline rent: what is included and what is not

Rent inclusions

Most institutions set rents to include services and utilities. This trend has gathered momentum

across the sector since the 2006-07 survey. Inclusion of internet access within the rent at

institutions has increased from 74% to 82.6% in the 2009-10 data. Energy inclusion has

increased from 91% to 96.8%. Inclusion of insurance within the rent has increased the most

from 56% in 2006-07 to 67.4% in 2009-10.

Figure 2: Percentage of respondents including utilities and other services in rent

Percentage of respondents including utilities and other services in their

rent

Institution Nomination PrivateInternet 74% - 17%

Energy 91% - 55%2006-07

Insurance 56% - 83%

Internet 80.2% 63.57% 68.8%

Energy 96.8% 95.68% 91.1%2008-09

Insurance 59.4% 64.14% 84.9%

Internet 82.6% 76.43% 79.0%

Energy 96.8% 96.50% 87.5%2009-10

Insurance 67.4% 65.37% 80.5%


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The 2006-07 survey found that the majority of private providers charged separately for utilities

and services. The current survey indicates a dramatic change in this picture. The earlier

finding was that under one in five (17%) providers included internet access in 2006-07. Three

years on, nearly four in five (79.0%) make this inclusion. Over the same period, the number

of respondents including energy costs in rent has increased from 55% to 87.5%. The inclusion

of contents insurance has fallen slightly from 83% in 2006-07 to 80.5% in 2009-10.

Where institutions did not include internet, energy or insurance in rental fees, they charged on

average 92.92, 275.00, and 14.33 a year respectively. The equivalent charges from

private suppliers were higher at 141.89 for internet and 295.00 for energy.

Additional costs

This survey examined other charges that were levied by providers in the following three

categories:

Deposit a fee paid by a student to secure against damage to the property or rentarrears at the end of the tenancy (at which time deduction may be made and the

balance returned)

Administration fee a fee paid by a student to cover the administration costs ofbooking a room. It is sometimes referred to as a booking fee and is often non-

refundable

Rent payment in advance paid by a student to secure a room at the time ofbooking and deducted from future rent payments

Deposits

Deposit protection does not apply to institutions which do not rent on assured shorthold

tenancies. Elsewhere, deposit protection has resulted in a reduction in the number of

landlords charging a deposit.

Fifty-seven per cent (40) of institutions and 62% (29) of private providers charged a deposit

which is held in case of damage or rent arrears. This is a considerable reduction on 2006-07

when 79% (of both institutions and private providers) charged a deposit.

Where a deposit is charged, however, the amount has increased from 180 in 2006-07 to

207.73 in 2009-10 for education institutions and from 198 in 2006-07 to 237.93 in 2009-

10 for private providers. The overall average deposit charged in 2009-10 was 220.42.

Most private providers who charge deposits fall within the deposit protection legislation,

implemented in April 2007. The law now requires compliance with specified timescales for the

return of deposits (around four weeks taking into account administrative time). The deposit

protection schemes do not apply to education institutions. The average time it takes them to

return a deposit stands at 4.8 weeks. However, some institutions took 16 weeks. It should be

remembered that many students need the return of their deposit quickly to pass on to their

next landlord as a new deposit.


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Most education institutions are members of two Government-approved Codes of Practice.xiii

Currently, the ANUK/Unipol Code, which covers around 20% of the education sector, imposes

a four-week deadline for returning deposits. The available evidence suggests this is being

met. The UUK Code stipulates no deadline, although it has recently been agreed, subject to

Government approval on a revised Code, to add a four-week deadline for returning deposits.

Any future survey should reflect a reduction from these long return times to the four-week

limit. UUK Code administrators are anticipated to intervene and force change where return

times are poor.

Administration fees

As their use continues to rise, it is important that administration fees are levied fairly. In

many cases a "booking fee" does not actually book anything. Whilst it secures a student's

place in some subsequent room allocation process, it does not involve the institution

contracting to provide the student with a specific room. So, if no actual room is booked and

the charge is made simply to cover the administrative cost of entering a student into a system,

the question arises: how much does this task really cost?

Over a quarter of all respondents used booking fees (28.0%; 19 institutional respondents, and

18 private providers). The average booking fee is 150.79 in institutional accommodation and

135.28 in private supplier accommodation but fees range from 25 to 300.. It would be

difficult to defend a charge of 300 without a contract having been formed. The levy of such a

high amount for simply entering details onto a computer system (often undertaken online by

the student themselves in any case) would seem an excessive administrative cost, if a student

subsequently wanted to withdraw from that system. In comparable areas where the Office of

Fair Trading has been asked to make an assessment of what is fair, it has generally set the fee

at around 35.00.

Advance rent

Additionally, 15% of institution respondents required their students to pay an average of

304.92 rent in advance. Although advance rent is subsequently deducted from routine rental

payments, it can represent a substantial up-front payment, often in the academic year before

the student moves in, or before they have received their student support package for the year.

A minority of private providers (three) reported that they asked for rent in advance, although

where this was the case, it averaged 416.67.

Control of accommodation in institutions

The organisation of the student accommodation function varies from institution to institution,

but in recent years there has been a trend to align it with the broader student services

function. This pattern follows the increasing emphasis in the sector on the student experience

and the recognition that students accommodation is a significant part of that experience.

Nearly half (48%) of respondents now organise and treat student accommodation as part of

student services.


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Some education institutions see student accommodation as being essentially about buildings

and their maintenance. Amongst respondents 41% of operational managers in student

accommodation report to the institutions Director of Estates or equivalent.

A small proportion of institutions (11%) reported that student accommodation sat within the

managerial compass of the Director of Finance. It is of interest to note that where the line of

responsibility is to the Director of Finance, rent was on average 8.98 per week more

expensive than accommodation under Estates Directorates, and 6.22 per week more

expensive than the average cost of accommodation under Student Services. This perhaps

reflects a stronger managerial interest in financial return.

Good practice dictates effective management through close collaboration between functions, in

particular estates, student services and finance. However, the organisational location of

student accommodation can provide a pointer to how an institution perceives its role as an

accommodation provider.

Changes to the cost of living

According to the Student Income and Expenditure Survey, in 2007-08 a full-time students

average income was 10,425. This was made up of:

main sources of student supportxiv 4,771 other sources of student support 1,025 paid work 2,108 support from family and friends 2,045 benefits 258 other sources of incomexv 219

However, 20% of this total average income (2,237) was paid directly to the institution as

tuition fee loans, leaving 8,188. Factoring in inflation,xvi this figure converts to 8,473 for

2009-10.

On the basis of the average contract length (40.5) and the overall average weekly rent

(98.99), the total expenditure on rent would be 4,003.91 (excluding additional fees and

deposit charges). This accounts for nearly half (48.9%) of a students overall average income,

and nearly all of that received through loans and grants. It would also exhaust the maximum

bursary for a residential FE student from the lowest income bracket (3,458 and 4,079 in

London). Commentary within the sector also recognises that these rents implicitly rely onparental support.xvii

The SIES 2007-08 found that students who started their course after the changes to student

support finance in 2006-07xviii faced a larger net debt than those who started before this date.

Unsurprisingly then, over half of all full-time students (53%) in 2007-08 reported doing paid

work during term-time, with a third of these stating that this had adversely affected their

studies. A further 56% of full-time students felt that financial concerns had weakened their

academic performance to some extent.xix


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Affordable rent

In the context of the evidence of students income continuing to be degraded by rises in rent

for purpose-built accommodation and by cost-of-living increases, it is essential that institutions

take affordability seriously.

Affordable is a word frequently used in relation to accommodation for students. But its

meaning is elusive because affordability varies according to the individual students financial

circumstances. It is, however, clear that as developers have upgraded the quality and

specification of accommodation, students have spent a higher proportion of their available

resources on where they live.

There is evidence, particularly in London, to suggest that top-end rents for high specification

amenity levels may now be exceeding the ability or preparedness of even the wealthier

students to pay them.xx

It is also important to differentiate between the rooms that are "most popular" at the

application stage and those that register the best satisfaction ratings amongst students who

are resident. The two things often turn out to be different. Research from Nottinghamxxi

shows that for the sample surveyed levels of dissatisfaction were higher in higher-priced

properties. This may reflect higher (unmet) expectations of service.

Institutions that get this right recognise that satisfaction levels are not straightforwardly a

function of the level of amenity. Detailed account must be taken of affordability and value for

money if students are to register satisfaction and positive feedback on the quality of their

experience. As discussed later in this report, there is substantial evidence to suggest that

larger, more communal flats in a middle price band are, once students actually start living inthem, a highly popular and successful accommodation option.xxii


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Provision and rent: variation across regions and

institutions

Regional variation

On average cost per bedspace London was still the most expensive area to live with an

average rent across institutionally and privately provided accommodation of 125.34 a week in

2009-10 (see table 2a). This represents a rise of 21.2 % on the 2006-07 figure (103.40). The

survey data shows that the cheapest place to live during the period was Northern Ireland at

64.17 a week (a decrease of 9.6%), followed by Wales at 79.40 per week (an increase of

18.5%).

The overall mean rent for London was 150.99 per week. The lowest overall mean rent was in

Northern Ireland at 67.62 per week (see table 2).

As rents increase, it is important that rent structures are devised to offer a range of productsand costs which reflect the diverse budgets, requirements and preferences of students.

Building in low-cost accommodation options is essential to avoid pricing the least well-off

students out of the market or forcing them to study from home.

As expected, there are significant regional variations in both the cost and ranges of

institutionally provided accommodation available:

Figure 3: Rental range in university-owned accommodation by region (2008-09)*

*East Midlands removed due to incomplete data

The average cost per bedspace across all accommodation surveyed stands at 98.99 per week

(see page 15). The table on the following page sets out, by region, the percentage of

bedspaces offered by institutions that remain under 90 per week.


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Figure 4: Percentage of rents in each region under 90 per week

Percentage of rents under

90/week

Region % under 90

per week

East of England 44.9

London 11.7

N. Ireland 99.7

North East 58.1

North West 64.8

Scotland 48.1

South East 34.3

South West 37.0

Wales 88.3

West Midlands 89.1

Rents by institution

Comparing rents at different institutions is complex, with different locations and institutional

characteristics leading to widely varied rental structures. A look at a sample of 13 different

universities across the UK shows the wide range of rents offered at these institutions.xxiii

Figure 5: Rental range in university-owned accommodation at selected institutions


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Institutions rents fall into between two and all eight bands. For the purposes of this analysis,

those which feature fewer than five bands have been classified as having a narrow range, and

those with five or more bands have been classified as having a wide range. Seven institutions

out of the 13 had a narrow range with five of these having only three rent bandings.

As was the case in the 2006-07 survey, Aston and Salford offer the highest proportion of low-

end rents, but also have the lowest rental range (two bands). This may be due to a

commitment to affordability, older stock, and/or the availability of privately provided

accommodation to offer more expensive, high-specification accommodation for students who

want it and can afford it.

Sheffield Hallam also has a narrow range of bands (three), with no accommodation costing

over 100 per week, and none below 70 per week (though the university provides the vast

majority of its accommodation through the private sector, as illustrated below). Similarly, the

University of Liverpool appears to have fewer rent bands and no very low rents, although

almost all of its rooms are under 100.

Leeds, St Andrews, Kent and Exeter have put together institutional provision and rental

structures which offer significant numbers of bedspaces within seven or all eight rent bands.

This gives students genuine choice, which has both breadth and depth.

Partnership arrangements with third-party suppliers

Figure 6: Rental range in nominated accommodation at different institutions

Four of the institutions also have nomination agreements with private providers. These form

an integral part of their portfolio.

The University of Leeds is one of these institutions. While nomination agreements at Leeds do

not produce as wide a range on cost, they do add to bedspace numbers and to the overall

range of accommodation. Exeter appears to offer nominated rooms as a more expensive

product option. These may be newer stock than their own accommodation or to a higher

specification. At the University of Kent most rooms in its nomination schemes fit into themiddle of its own rental structure.


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Sheffield Hallam offers a good example of how working with the private sector can produce

purpose-built solutions outside the institutional framework. Most of Hallams accommodation

is provided through nomination agreements. In partnership with the private sector, the

university is able to offer accommodation with a range of rent choices, including low-cost

options.


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Purpose-built accommodation and the PRS: comparisons by city

The data used in this section was collected in addition to the main survey and is intended to

provide an illustration of the pricing structure within different student accommodation rental

markets.

Because of the nature of the off-street market, accurate data is difficult to come byxxiv,

particularly in terms of rent levels. A number of cities have been analysed where there is a

central point in the student accommodation market (marked * in figure 7) and data has also

been used for cities where a significant amount of work has been done in the local area.

Average rents for an off-street property are listed below for a selection of university cities:

Figure 7

Average rent per week for an off-

street property

City Rent (to nearest

)

*Nottingham 63

*Leeds 63

Birmingham 62

*London 107

Sheffield 61

*Liverpool 55

*Bradford 45

In looking at the rental structures in these cities, adjustments have been made so that rents

are fully comparable over a 44-week contract. Allowance has been made for inclusivity of

insurance (3 per week), utilities (6) and internet (2.88). Some rents will include additional

items such as travel cards, Junior Common Room fees, NUS Extra cards and access to fitness

facilities, but these are not treated here as core to the accommodation product and are

therefore excluded. Shaded columns on the graphs represent different average weekly rents

for developments. The comparative rent for an off-street property is indicated in dark on the

graph.

The horizontal axis represents each development / property; the vertical axis represents the

average rent per week.


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Nottingham

Figure 8

In Nottingham there is only one rent option that is cheaper than off-street accommodation.

There are a number of private providers active in the Nottingham market. Many of the lower-

cost rooms have shared bathroom facilities, although some of these rooms have in fact been

developed within complexes which also offer higher-grade provision set at a higher rent level.

Much of the accommodation between 80 and 100 is ensuite and there are 20 different cost

options within this band. Once rents move over the 100 mark, there is a prevalence of studio

flats. Although these are likely to represent only a few bedspaces, they are at very high-end

rents compared to the rest of the provision.


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Leeds

Figure 9

In Leeds the cheapest rent option, when allowance is made for inclusivity, is a room in an off-

street property. The average cost is 63 per week. There are a number of private providers

active in the Leeds market. Some have worked out partnership arrangements with local

institutions. The University of Leeds also has a large stock of its own accommodation. Much

of the accommodation at the lower end of the rent structure comprises a combination of

University stock and rooms with shared bathroom facilities.

The middle area of the graph, between 80 and 110 represents a wider range of private

providers and is mainly made up of ensuite provision. At the top end of the market, a large

number of providers offer small levels of studio accommodation and even penthouses. These

range from 120 to around 180 per week.


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Birmingham

Figure 10

In Birmingham the distribution of maximum and minimum rents is set wide. The cheapest

rooms are pitched around 50 with the most expensive at just under 200.

It is clear from the graph that there is a wide range of rent options suitable for a range of

pockets. There are a number of very low rent options, with five coming in at less than a room

in an off-street property. There is a noticeable step up in the graph where there are a large

number of rooms priced at between 75 and 100 which are mainly, but not exclusively,

ensuite.

Studios reflect the trends seen in Leeds and Nottingham, as they come out as the most

expensive option. The steep rise to the right of the graph represents the premium rent which

studio accommodation attracts, comfortably exceeding 150 per week in some cases.


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London

Figure 11

The student accommodation profile for London is unique in the UK sector. There are more

not-for-profit providers which make up many of the rental options within the lower end of the

market. These organisations, such as Goodenough College and International Student House,

consider applications against a range of criteria in order to create and maintain a culturally

diverse but balanced residential community. They also aim to set and keep rents at an

affordable level.

The average rent for a room in a shared property in London is around 100 per week which,

though more expensive than elsewhere in the country, is still the third lowest rent option once

adjustment is made for inclusivity. Of course, it is a vast city and rents are likely to vary

according to proximity to certain institutions or by zone or borough.

There is a noticeable rise at 135 where the majority of accommodation becomes en suite and

this extends upwards to the most expensive en suite accommodation at 290 per week. The

most expensive options are studio flats that extend upwards to 350 a week


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Sheffield

Figure 12

In Sheffield a large proportion of the market is under 100 a week notwithstanding the

emergence of more expensive new-build accommodation as a significant feature in recent

years. A room in an off-street property is still a competitive rent option only four

accommodation types are cheaper.

At around the mid-point of the graph, rents are almost exclusively for ensuite rooms.

Although rent levels are somewhat lower, the trends are similar to those seen in other cities

with a tendency to move from standard wash facilities to ensuite as rents increase. A number

of studio rooms are present in the market and again these make up the more expensive rental

options.


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Liverpool

Figure 13

Liverpools cheapest rental options are in purpose-built developments, with off-street property

being the fifth cheapest option. The graph shows a steady rise in rents, with most falling

between 50 and 100. The provision on offer gradually moves from standard wash facilities

through to ensuite, which becomes increasingly prominent as rents move above 70.

The top end of the rental structure is also characterised by a steady arc. Studio flats are again

preponderant in this market segment, although there appear to be fewer studio rent options in

Liverpool than in other cities compared here.

Conclusions from comparisons

As rents increase, it is important that rent structures are devised to offer a range of products

and costs which reflect the diverse budgets, requirements and preferences of students.

Building in low-cost accommodation options is essential to avoid pricing the least well-off

students out of the market or forcing them to study from home.

As expected, there are significant regional variations in both the cost and ranges of

institutionally provided accommodation available.


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Figure 16: Percentage of bedspaces by category of accommodation

Bedspaces by category of accommodation

Category% bedspaces

2006-07*

%bedspaces2008-09

% bedspaces 2009-10

Institution

Self-catering single38.53 36.9 35.5

Self-catering ensuite 31.30 40.6 40.4

Studiosingle

Studiodouble

Studioflat

1.120.60.3

0.90.70.3

1.0

Full-board single10.30 9.2 9.4

Full-board ensuite2.56 4.0 4.7

Part-board single2.95 3.4 2.8

Part-board ensuite1.12 0.8 0.8

Houses 0.93 1.5 1.8

Flats 3.16 2.6 3.6

Total 91.97 100 100

Privateproviders

Self-catering single15 19.7 22.0

Self-catering ensuite 81 73.5 71.2

Studio flat single

Studio flat double3

4.81.9

6.74.72.1

6.8

Total99 100 100

Nomination

Self-catering single35.9 22.1 22.5

Self-catering ensuite 64.1 75.8 75.5

Studio flat single

Studio flat double - 1.80.4 1.2 1.90.1 2

Total 100 100 100

Self-catered cluster accommodation

Self-catered single accommodation is the second most common type of student

accommodation, making up 33% of bedspaces in 2008-10. This represents a sizeable shift, as

this type of accommodation has been the most common throughout all previous surveys.

However, there may be a re-emerging demand for this type of high-density/low-cost

accommodation. Recently, some non-ensuite "eco" flats have been developed for larger

groups of students (10 to 12 sharing) with considerable success at Lancaster University and

Leeds Metropolitan University.xxvii


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Catered accommodation

Over the past 15 years, catered accommodation has declined steadily, but slowly. In 1994-95

27% of student accommodation was catered. By 2001 this figure had declined to 21% and

dropped further to 19% by 2004-05. By 2006-07 17.3%xxviii of accommodation managed by

education establishments was catered.

Figures for 2009-10 stand at 17.7%. It may be that the catered halls which have survived will

remain in service as an enduring part of the culture of the educational institutions in which

they sit. As accommodation continues to be developed, their share of the stock is likely to

continue to fall.

Shared rooms

Shared rooms have always occupied a small minority position in institutional portfolios. Over

the last 20 years they have accounted for between 2% and 4% of surveyed bedspaces.

International comparisons show that this is in stark contrast to some sectors overseas, whereshared rooms are a much more prominent feature.xxix

Although this survey only covered single rooms, some respondents did give additional

information on twin rooms, which totalled around an extra 1,200 bedspaces. Whilst this type

of room has become less common over the years perhaps because of issues around privacy

or cultural differences its persistence suggests that for some institutions and some students

it is still a viable and lower-cost option. Accommodation providers may return to it in the

future.

Shared rooms appear to be particularly prominent in London.xxx

International Student House,for example, a specialist voluntary sector provider in London, reports that shared rooms for

four students prove very popular, offering low-cost accommodation, located, in this case, in

central London.

The studio flat

The studio flat registered as 1% of the total stock in the 2006-07 survey. By 2009-10 this

figure has risen to only 2%. What growth has occurred has taken place almost entirely in the

private supplier accommodation (see figure 8). There is considerable "hype" around studio

flats, routinely described as "luxury", "premium" or "penthouse apartments". Although these

high-priced units are increasingly associated with the London market, the data reveals that the

2% level is fairly consistent across the country. Typically, outside London it comprises a small

number of units, located on the top floor of higher-priced buildings.

Specialist housing

The 2009-10 survey also looks at the availability of housing for specific groups, in particular for

disabled students and student families.

Given the stringent requirements under equality legislation,xxxi it was not surprising to see that

95.7% of institutional survey respondents provided accommodation for disabled students. For

private providers, this figure stood at 86.2%. This lower figure suggests that newer builds do


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not have disabled roomsper se, but are more likely to be convertible on request. As one

private provider commented in the survey;

Although rooms have not been specifically adapted for people with disabilities, all rooms are

accessible by wheelchair and adaptations could be made when required.

The total proportion of bedspaces for disabled students in the sector across 2008-09 and

2009-10 data is 1.4%. Given that an estimated 7.3%xxxii of students are known to have a

disability this would suggest a shortage in provision. However, many disabled students will not

have a need for physical changes to their accommodation, and where they do, their

accommodation may be provided through the local authority. Numbers of bedspaces ranged

from 179 to only one or two rooms in smaller colleges, although those with the highest

numbers of rooms for disabled students were not necessarily those with the largest stock of

accommodation. In terms of the numbers of bedspaces these percentages equated to 1% of

institutional accommodation and just below 4% of privately provided accommodation.

Family accommodation is less common in the sector, with only 17% of private providers and

32% of institutional providers making any provision. Numbers of bedspaces ranged from 306down to five across institutions that did have such provision. Numbers of family

accommodation places equated to 0.71% of bedspaces over 2008-09 and 2009-10.

Not all families will need accommodation, as many students will be studying at institutions

which are a commutable distance from their home. But such low figures would suggest there

are students with families struggling to find suitable, affordable accommodation. This shortage

may be attributable to family housing often yielding smaller profit margins than other student

housing. Institutions or private developers cannot charge rent per room for families as they

can with single students, so income is lower. Another possible reason is that family housing

rents need to be kept as low as possible, as the Governments periodic Student Income andExpenditure Surveys show that student parents have significantly higher expenditure than

most students.xxxiii

The balance between institutional and private providers in purpose-

built student accommodation

Institutionally-owned and managed housing still makes up the vast majority of purpose-built

accommodation. In the survey for 2009-10 78% of purpose-built provision fell into this

category. A further 12% fell under various institutionally-linked arrangements. Ten per cent

was provided and directly let by private suppliers.

A wider data set of information is available from the suppliers of the UUK and ANUK/Unipol

Codes of Practice which have wide coverage in the sector. Here, 69% of bedspaces are

directly provided by institutional suppliers with the remaining 31% being provided by private

suppliers. The definitions in this case are different to those in the survey because these

figures reflect who "controls and manages" the building. Almost all of these are HEIs. FECs

provide only around 0.5% of accommodation.

The expansion of privately provided purpose-built accommodation in the last two decades has

been rapidxxxiv

, but there are real difficulties in determining what counts as "private" and"institutional" when operational links and nomination arrangements through institutions come

into play.


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In the 2003-04 NUS Accommodation Costs Survey, 4.5% of student accommodation was

recorded as being private, reaching 19% in the 2006-07 survey.xxxv By 2009-10 it had fallen

to 10% but this reflects institutions "buying in" bedspaces which they then recorded as their

own. "Buying in" has been much more prevalent over the last three years with the significant

increase in student intake and HEIs recognising the competitive advantage of being able to

guarantee institutional bedspaces to all new students.

On the basis of the survey and the UUK/ANUK data sets, it is reasonable to conclude that

private provision currently stands at around 29% of all purpose-built provision still lower

than is often thought to be the case. Findings from the sector would appear to corroborate

these proportions.xxxvi They estimate that the market nationally is nearer to two thirds

institutional and one third private and nomination.

A prevalent view has been that private purpose-built student accommodation would become

the norm over the last decade. However, there is no doubt that the credit crunch and its

knock-on effect on the property market have halted developments outside Londonxxxvii

(although those in the pipeline in 2008 continue to come on line). Much of the apparent

growth of certain private providers has been achieved by suppliers selling stock between each

other.xxxviii

Planned expansion figures

From the respondents to this question, the majority of institutions responding to this question

(60%) had no changes in bedspace numbers planned for the coming year, perhaps reflecting

the current economic climate. A similar figure (59%) of institutions reported no changes

planned for nomination agreements. A quarter of respondents were planning to increase theirbedspaces (by a total of 2,988) and a further 12% had more bedspaces planned through

nomination agreements (totalling 584).

Only 3% of institutions were planning to decrease their own stock and only 5% were planning

to decrease bedspaces supplied through nomination agreements. Just over one in ten (12%)

did not know what changes would be made to their stock and nearly a quarter (24%) did not

know if any changes would be seen in their numbers of nomination agreement bedspaces.

Other significant developments shaping the product

Energy performance

The growing popularity of rent inclusions suggests that students prefer the system. But it does

raise the possibility that inclusion ill-equips students:

to rent in the private rented sector, either during their course or afterwards to be economic in their energy use

Since October 2008 landlords offering property for rent have been required by law to provide

prospective tenants with an Energy Performance Certificate for their property. EPCs areprepared by accredited energy assessors and are intended to show prospective tenants the

energy performance of the building they are planning to rent. Landlords are required to


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provide an EPC at the point of marketing to prospective tenants and to tenants when they sign

for the property.

An EPC is compulsory for all rented accommodation except where parts of a house or flats are

let on single tenancy agreements. For the purposes of student lets, this exemption creates a

significant gap in the initiative, arguably sufficient to compromise its objectives.

As recorded elsewhere in the report, including energy costs in rent helps students to manage

their budget. However, it can have the effect of keeping hidden practical issues around energy

economy and of dis-incentivising tenants from keeping fuel usage down. In this context, EPCs

can be a useful tool in raising awareness of energy consumption. It is therefore of concern

that only 15% of major commercial operators and 24% of institutions give this information to

students. Twenty-nine per cent of private providers and 18% of institutions did say that they

would provide this information on request, which would indicate that this information is

available.

Projects such as student switch off have proved useful in promoting more energy efficiency instudent accommodation and in delivering energy savings.xxxix Unipol offers a pay-as-you-go

energy meter, which encourages their tenants to utilise energy responsibly. In some of their

newer developments, UPP provides real-time energy monitoring. As environmental concerns

grow in the public consciousness, it may be that such green mechanisms are the way of the

future.

Accreditation

Almost all institutions and private providers recognise the importance of voluntarily agreeing to

a set of standards and being held accountable to such an agreement through accreditation.

After students have lived in institutional accommodation most students choose to live in what

are termed off-street properties (smaller houses) in the community. It is important that

institutions recognise they have an important role to play in monitoring and promoting both

physical and management standards in these properties through the active development and

extension of accreditation for their students.

Such promotion takes into account the specific needs of student occupants, health and safety

considerations for higher density living arrangements and the high levels of supportive

management required. It also entails promoting the schemes in partnership with local

authorities, local landlords and students' unions.

It is pleasing to report that 48% of institutions surveyed ran or were working with an

accreditation scheme which acknowledged this wider commitment to housing standards. For a

list of those institutions that ran or worked with an accreditation scheme, see page 59.


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Are students getting what they want out of the market?

It is clear that the student market is shifting, that a new student housing product has been

developed, and a new kind of student landlord has emerged. Student housing is becoming very

big business but it remains to be seen how far this development serves the interests of

students seeking to minimise their accommodation costs and so reduce the level of

indebtedness on graduationxl

What do students want, and what are they getting?

The trend to provide a higher specification of accommodation may have acted as a double-

edged sword: improving standards has corresponded with considerable rises in development

costs and rents.

Housing is a highly complex amenity. Tenant satisfaction levels do not necessarily increase

even where providers appear to respond to student need. However, a number of student-

focused surveys highlight some key areas of concern for students regarding their

accommodation.

Value for money

Research by CUBO in 2008xli showed that 93% of student respondents rate accommodation

cost as very important, and over a third of all undergraduates and postgraduates are

dissatisfied with the cost of their accommodation. This suggests that a proportion of students

are not happy about what rents they are paying, or they think they are not getting value for

money.

The cost of living away from home is substantial full-time students reported spending an

average of 6,496 on living costsxlii (other than their course and housing) over the academic

year 2007-08.xliii Furthermore, students from lower socio-economic groups were reported as

having substantially higher living costs.xliv

As this survey shows, the vast majority of accommodation is self-catered, and the most

common rooms are single, either with shared bathroom facilities or with ensuite. As average

rents for ensuite accommodation are 19-24 higher per week than those with shared facilities,

there is clearly a tension here.

Accommodation now on average accounts for nearly all of an average students income from

loans and grants, in some cases exceeding it. Substantial increases in rent have persisted

through boom and bust. However rental increases appear to have slowed between 2008-09

and 2009-10, suggesting that students may be resisting ever-increasing rents. This is quite a

contrast to other reports on the student housing market:

The [student housing] market is now estimated to be worth 6.6bn and we expect it to grow

to over 20bn with a further 78,000 bedspaces delivered to the market over the next six

years.xlv


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Quality

Students clearly want accommodation to be affordable. Ninety-one per cent also rated quality

of accommodation as very important. This highlights the complex balance between raising

accommodation standards without allowing rents to escalate beyond realistic levels of

affordability. For example, access to broadband facilities rates consistently as a top priority for

students.xlvi

However providing good quality accommodation does not necessarily entail the automatic

provision of ensuite facilities, double beds and gyms. Quality is about providing a good range

of well-managed accommodation in a good state of repair. Indeed, research carried in

Nottingham in 2008 highlighted that whilst nearly a third (32%) of first-year students

considered ensuite accommodation important, this figure dropped to 15% for returning

students.xlvii

A false market?

As this survey has shown, self-catered and self-catered ensuite provision represent the most

common types of accommodation. Despite evidence that ensuite accommodation is not the

top priority for most students, and decreasingly important to returning students, it appears

that ensuite provision is still what is being commissioned despite evidence that it:

is not the top priority for most students becomes less and less important for returning students

Whilst there is still a range of accommodation options including shared rooms, catered

accommodation and studio flats with only one or two people sharing kitchen, bathroom and

living space these are in evidence in much smaller numbers. This is not to say that the

addition of ensuite accommodation and enhanced specification are not welcome indeed there

is clearly a demand for such housing amongst students. Ensuite accommodation can also be

significant in terms of meeting the needs of a diverse student body many students perhaps

requiring private bathrooms for a number of reasons.

There are a number of factors which may be behind the current preference for developing

accommodation with ensuite facilities:

marketing through websites and to students on open days parents wanting the best for their children and exerting their influence accordingly better financial returns ensuite accommodation being the newest available

Potentially, a gap is developing in student accommodation between what students need and

what is being developed. If student accommodation does not match what students need or

can afford, this may cause more students to explore alternatives to purpose-built

accommodation, for example staying at home or opting for off-street properties.


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Are students staying at home more?

The number of students staying at home has increased markedly over time. In the academic

year 1984-85, only around 8% of first-year students were living at home whilst studying. By

2006-07 this figure was up to 20%.xlviii However, given the burgeoning student

accommodation sector and a shortage of student accommodation, this may suggest that

student accommodation is still being filled with students of a certain profile.

Traditionally, institutional accommodation was the norm, as discussed earlier in this report.

However, the evidence suggests that, for the student body as a whole, this is not the case

(although it remains so for first-year students). According to the latest figures, 23% of

students are living with parents or relatives. This is 1% more than those who live in halls.

One reason for this might be cost research by the UK Youth Parliament shows that over a

third of students look for courses closer to home to reduce costs.xlix

Research by the Higher Education Funding Council for England and Wales suggests that staying

at home appears to be more common amongst certain groups. These include students:

from certain Black and Minority Ethnic (BME) groups from lower socio-economic groups with a disability but not in receipt of Disability Living Allowance (DLA) living in Londonl studying subjects allied to medicineli and those living in other areas of the UK such as Scotland lii

Whilst it is not possible here to explore in detail why this might be, it may be that

accommodation does not suit certain groups because of location, cost, or design. There arelikely to be a number of reasons for the increase in students opting to stay at home during

their course. Significant factors in making this choice may be one or more of:

family commitments (lack of) financial support differing cultural norms

For some, living at home will be their preferred choice, irrespective of other factors liii. In any

case, this would suggest that the choices of where to study are narrower for some students

than for others.

Are more students choosing off-street properties?

Some returning students stay on in purpose-built accommodation because they like what it

offers:

the level of amenity all-inclusivity being in a student environment safety and security the relatively young age of the stock.liv


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However, research suggests that most returning students still choose to move into the PRS for

the rest of their course.lv The NUS Student Experience research suggested that only 19% of

returning students were housed in purpose-built accommodation, compared to 50% of first-

years.lvi This would appear to back up the general assumption that students in the main still

leave student accommodation after their first year and move into the private rented sector.


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Looking to the future

Overview

Predicting changes that may emerge in the sector is difficult, and is made more difficult by:

the volatile economic climate cuts to education budgets question marks over the future student contribution to tuition costs a relatively high level of uncertainty from the accommodation sector itself

Notwithstanding this, some assumptions can be made in the context of:

the resilience in the growth of student numbers within the sector, particularlyinternational students

plans by the Department for Business, Innovation and Skills for a New UniversityChallenge: Unlocking Britains Talent, an initiative which aims to bring the benefits of

local higher education to bear across the country

what we know about the accommodation currently on offerThese challenges may elicit a number of responses from the accommodation market and

suppliers. A number of prognoses can be constructed which reflect different views of what

might happen:

education institutions, suffering funding cuts, may turn to a greater extent to theprivate sector to upgrade and continue developing their accommodation

education institutions, suffering funding cuts with stabilising home student intakes, maystop developing their accommodation portfolio

the private sector, suffering higher loan gearing as capital asset values have fallen, maycease development until their gearing is reduced, maximising their revenue return (as

has been discussed elsewhere), or

new developers, unfamiliar with the student market, may see yields within the studentprivate sector as a good investment compared with other commercial property

development, and this would see increased speculative development taking place

Not until the next survey in 2013 will these outcomes be clearer. Below, however, are some

suggestions of different directions the market may develop in.

Purpose-built accommodation

Purpose-built accommodation currently serves mainly first-year students, together with some

returning (often older) and international students. Although there are cities where returning

students live in purpose-built complexes (such as Bradford, Manchester and Liverpool), this is

still not the norm. In some cities the number of returning students being housed has reduced

as the number of first-year students has risen.

Recent planning changes, where all HMOs will need planning permission, would seem to

indicate a shift of public policy towards discouraging the continued development of off-street

housing for students. It might be expected, therefore, that this would result in planning


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policies that are more favourable to the development of purpose-built complexes, but here

planning requirements are also increasing. The London Plan, for example, has recently

suggested that various charges should attach under Section 106 arrangements to private

student accommodation developments. Overall, the planning environment for both student

complexes and off-street properties is becoming more restrictive. This may discourage the

high-density development that has been a feature of student accommodation over the last

decade.

If purpose-built student accommodation is to expand, it will do so either where there are

already accommodation shortages and pent-up demand or future supply will need to appeal to

a wider group of returning students as a serious accommodation option.

To be attractive to returning students a number of issues need to be addressed:

where should the developments be located? how will developments interface with existing local provisions? what amenities do students require and want, and how are the demands of

returning students different to first-year students?

how does this impact on the overall cost of the accommodation? to what standard will the accommodation be managed and maintained?

The higher-priced ensuite development will need to give way to a lower-cost, more

communally-shared type of accommodation with larger living spaces that is not associated

with first-year students. It will be interesting to see whether the sector can rise to this

challenge.

Nomination agreements

In responding to government cuts in HE funding, institutions are likely to require efficien

uk universities - accommodation costs survey 2009-2010

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