Private Developments Plugging Leicester’s Student Room Supply Gaps

Government targets state that 1350 new homes will need to be built in Leicester each year until 2031 in order to meet the growing population demand. This is part of a nationwide crisis, which is predicted to leave a shortage of more than a million homes by 2022, according to The Joseph Rowntree Foundation. Already there are 1.8 million people on housing waiting lists and the ad hoc solution of urban sprawl has had a negative impact on communities.

One way of addressing the housing shortage in Leicester is ‘article 4’, which was enacted by the city council on August 20, 2014. This is a legal mechanism that removes permitted development rights within a defined area, meaning that planning permission is required to change the use of any further homes to Houses in Multiple Occupation in specific areas of the city. Although a crucial step in ensuring the mobility of the workforce, this will also lead to less homes being available to the rapidly increasing student population.

Leicester’s Student Population Growth

Leicester has two highly regarded universities and one of the highest student populations in the UK – in excess of 70,000, if you include the city’s large college. This figure is set to grow even further with record intake levels in 2014 and the potential for a further 5% hike in 2015.

This growth is primarily as the result of new government legislation, enabling UK universities to take in an additional 30,000 students in 2014 and an unlimited number in 2015. The projected 5% increase in intake is based on the experience in Australia after a similar move in 2012. With the University of Leicester revealing just over seven applicants for each place back in 2010, and both universities inundated with calls during clearing this year, there is certainly no shortage of demand.

Further catalysts of this projected growth are the reputation of Leicester’s universities, the large international student population (set to be enhanced by increased global mobility) and the high levels of student experience in the city. With application levels back on an upwards trajectory after a minor dip following the course fees hike in 2012, this could result in a sustained growth in Leicester’s student population for years to come.

The Student Housing Crisis

According to the Leicester City Council’s Student Housing SPD (2012), there are 7,764 bed spaces in total at the University of Leicester and De Montfort University, and an additional 3,575 rooms in private PBSA. It was also noted that a further 1,567 PBSA rooms were under construction and 2,534 rooms had had planning permission granted. Even if you include these in the total figure, this equates to only 15,440 rooms. This leaves the majority of students having to secure space in HMOs either within Leicester or outside the city.

With the enactment of article 4 by the Leicester City Council, this creates a desperate need for more PBSA in the city and it is the private sector that is filling this gap.

“We have seen a similar situation across numerous UK cities,” explains James Harrington, the business development manager at Emerging Property – the global master agents for Tudor Studios, a new 255-room student development in Leicester city centre. “In Aberdeen, we had a student development secure rental income up to 54% higher than projected levels due to the chronic shortage of rooms in the city.”

In Aberdeen’s case, such was the shortage of rooms that 300 first year students had to be temporarily housed in a local hotel.

“We identified Leicester as a prime city for a student development in the same way as we did with Aberdeen,” Mr Harrington goes on to explain. “Quality universities, a large and expanding international student population and an existing housing crisis – all of this lends itself to PBSA.”

Such developments are also good for the city. It has been widely reported that a large concentration of students living in HMOs can cause animosity with local residents and have a detrimental impact on established communities. Such PBSA developments can help to enrich areas assigned for regeneration, boost local businesses and catalyse the improved provision of amenities.

“Tudor Studios has been designed to satisfy the requirements of the modern day student, with spacious studio rooms and excellent onsite facilities, including a professional property management company within the building,” Mr Harrington informs us. “Not only will this help to regenerate this part of Leicester, but will also boost the attraction of Leicester’s universities, with quality accommodation a key aspect of the overall student experience.”

With student numbers growing and the availability of rooms diminishing, Leicester is in desperate need of such high quality student developments.

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