Student ghetto. The very phrase sounds rude, as if it should be spat out in a disparaging tone. And with the numbers of students rising all the time (see below), the prospect of even more students living in concentrated areas close to their colleges and universities is real enough. Rising university costs notwithstanding, the number of students does not look set to fall any time soon.
But ghetto? It’s an unfair word, say many, including Ian Scott, manager of iQ, the student accommodation fund run by Quintain in a joint venture with the Wellcome Trust.
Scott says: “It’s a very emotive term. It implies impoverished, neglected and disadvantaged.”
Scott’s underlying point is that the accommodation developed by iQ is none of those things and he is clearly right. Just take a look at some of its schemes on the iQ website (www.iq-student-accommodation.com).
For those with memories of student houses decades ago, the comfort of the purpose-built modern student digs in developments will come as a surprise.
Still, not all student accommodation is like Quintain’s luxurious en suite rooms. Grotty houses of multiple occupation still exist and whether ghetto is a fair word or not, there seems little doubt that housing large numbers in specific locations will be a continuing need, particularly near universities.
It is also true that putting up better student accommodation costs more than students paid historically. Quintain’s student rooms are much nicer than anything you were likely to find just 10 years ago, but the rent is a good deal more too. Weekly rents in its Hoxton development, N1, for instance, are being marketed at £235 a week for a 15m² (161 sq ft) en suite bedroom. This can go up to £360 a week for the best studio flats. Admittedly they are plush, but this is a rent many working people would find a challenge, let alone students.
The relative luxury of schemes such as iQ’s also reflects the fact that more students are richer, or at least their parents are, which means they have the means to pay more for their accommodation. In fact, the commercialisation of student accommodation goes hand-in-hand with the commercialisation of higher education as a whole. Of course, some students are still on a tight budget, but a significant minority are not.
This in itself is likely to work against the student ghetto stereotype.
Scott says: “We like to think we have a positive regeneration impact where we put up accommodation. There can be a real boost to a local area because of students’ spending power, which is estimated at between £5,000 and £10,000 per annum, most of which goes on food, shopping and bars.”
Scott sees the student developments of companies such as Quintain as bringing other benefits too. Not only is it providing extra accommodation for the increasing number of students, it is making up for university stock that has declined in quality, he says.
That said, not every university town is equally economically attractive to student accommodation developers. It is no accident that iQ’s stock is in places such as London, Edinburgh and Bristol, all of which have strong property markets generally.
One reason this is so, says Scott, is that construction costs do not alter much even though the final value of the assets is greater where the general property market is more highly valued. The reason iQ is not in Manchester or Liverpool, he says, is that “the pricing is not attractive”.
This does not mean, however, that student developers will not move into those important university cities as the deals become achievable, he adds. Indeed, not all the places where iQ has invested are on the blue-chip property list: it has invested in Salford, Leeds, Sheffield and Preston, for instance.
The differences between university towns also explain the differing planning strategies of local councils. Al Watson, head of planning and environment at law firm Taylor Wessing, says: “We see very distinct differences in the planning strategies deployed by councils. In London, land values and expectations from the increasing number of wealthy overseas students means that new student accommodation schemes sit comfortably in central London. Beyond the capital it is fair to say that the student ghetto syndrome does exist.”
But where it is affordable, to both landlords and students, most people seem to agree that purpose-built accommodation is better than residential houses overfilled with noisy undergraduates.
There are other consequences for expanding university towns too. Tony Hutchinson, director at Capita, says: “It is universally acknowledged that an influx of students into a neighbourhood is a bad thing, driving up house prices and driving out a stable population.”
The market difficulty (or opportunity, depending on your perspective) is that buyers can divide properties into flats or bedsits and easily outbid either occupiers or landlords who have a family home in mind. That is why, as Hutchinson says: “We normally see student housing pushing out long-term residents.” Students may traditionally be regarded as “poor” but when they hunt for property in packs they can out-muscle many buyers.”
On the other hand, says Hutchinson, there is another way to look at it.
He says: “An influx of aspirational young people into a neighbourhood that has homes suitable for conversion can bring with them vibrancy and the ability to support local shops, cafés and bars, stimulate new artistic and creative enterprises, and provide new workers.”
Hutchinson points out that when Google picked King’s Cross in London for its new headquarters, its managing director suggested that the proximity of students was one factor in the choice.
Andrew Kane, higher education specialist at Newcastle architect FaulknerBrown, is another who acknowledges the challenges of student accommodation, but also looks to the potential advantages.
He says the effect of “unmanaged” student housing on the community is usually of great concern to local authorities. “What we generally find, particularly from a planning perspective, is that there is much more support for managed student facilities.”
FaulknerBrown, which has advised on student residential projects in Sheffield and Bangor in north Wales, among other places, has found that purpose-built developments suit everybody better.
But that is not to say that managed student schemes are without their problems. One, says Kane, is that they can separate town from gown rather than integrate them.
He adds: “The danger is that you move towards gated communities, which is not necessarily desirable. Most people want university populations to be part of the town, not separate from it.”
This is one reason why Kane always advises that shared facilities are a good thing. If there is a shop on a student accommodation scheme, for instance, there is no reason why the general community should not use it. Similarly, student rooms can easily be used for holiday lets, halls for conferences or aerobics classes, and so on.
A willingness to share facilities is also important economically for student accommodation schemes, not least because the standard model for letting student rooms is typically 42 weeks a year for undergraduates, with some 50-week lets available. Economically and socially, integration is likely to be a very good thing.
Increasing student numbers
Despite the increasing cost of going to university, student numbers are rising, which is one reason why student accommodation is booming.
In 2013, there were almost 500,000 students beginning full-time undergraduate courses in the UK, the highest ever number.
The highest proportion came from Northern Ireland, where 36% of 18-year-olds entered higher education.
