What’s the future for Canterbury’s student housing market? Steve Williams examines a complicated issue:
The face and nature of urban Canterbury has evolved dramatically over the last 20 years with one of the most noticeable developments being the growth of higher education.
It has created employment, brought a wide range of new facilities and attracted large numbers of young people to the city.
There are however other consequences – intended or otherwise – felt by long-term inhabitants, with none so controversial as where students live.
As the universities expanded, many homes were turned into houses of multiple occupancy (HMOs). Indeed, so rapid was the transformation that some neighbourhoods soon became overwhelmed by this type of housing.
Recognising this trend, the city council introduced its “Change of Use Article 4 Directive” which sought to limit HMO numbers by requiring landlords to obtain permission for change of use.
Applications for this have been minimal as there are now so few landlords entering the market
Moreover, there are other factors in play which might alter the student accommodation scene.
Conventional wisdom has for a while dictated that by providing more purpose-built student accommodation (PBSA), fewer houses would be needed by those studying at university thereby freeing them up for other people such as professionals, families or retirees.
The evidence does not support this argument.
Firstly, it is important to understand not all PBSA is the same. For the University of Kent, most of its PBSA is located on campus at the edge of the city.
Canterbury Christ Church University is, however, located centrally and this raises the question of where students will live during term time.
We have therefore seen a proliferation of PBSA across the centre, much of it not built by Christ Church itself but by independent companies with little, if any accountability, to the university or responsibiliy to the wider community.
Those directly affected by these developments cannot see their value. Residents I speak to are dismayed by a lack of understanding when it comes to the long term impact of these blocks on urban Canterbury.
Standard housing stock can be occupied by students as well as families, professionals or retirees and can transition between these groups from vendor to purchaser. PBSA, on the other hand, has one function: to accommodate students.
Unless an entire block undergoes a significant reconfiguration at substantial cost, it can’t be changed.
The argument advanced for more of this accommodation is that given the choice many, if not most students, would rather stay in purpose built units.
So the theory goes that if we build more, demand for HMOs will decrease and some landlords won’t be able to let their properties, eventually choosing to sell them or let them out to different tenant groups.
This, however, simply does not hold up when you look at the evidence based on numbers.
Very few of the existing halls of residence have 100% occupancy levels, indeed several in urban Canterbury are not full long after the academic year has started.
That suggests demand for purpose-built accommodation is not at the level some assume. Instead the more of these blocks built, the greater number of rooms remaining empty.
According to Christ Church, there are more than 300 rooms left empty in purpose-built student accommodation blocks in the city centre. It appears we have passed saturation point and are entering oversupply territory.
With proposals for more PBSA stock to be built in the next 18 months, residents are naturally concerned.
Sites earmarked for development include but are not limited to Cossington Road, Havelock Street, the former Dairy Crest site on Military Road, the former St Mary Bredin School at Rhodaus Town and a large tranche of the Kingsmead redevelopment site.
There is also little certainty that student numbers will continue to increase year on year, challenging the assumption that demand for accommodation will do the same.
I have long argued that while universities are fantastic places to continue learning, they are not the only place, and equally a degree is not the only route to a rewarding career.
As apprenticeships and vocational training meet with approval from employers, some younger people will opt for an alternative path once they weigh up the cost benefit of a university degree.
New blocks of PBSA might fill quite quickly, particularly for the first few years, but as wear and tear starts to make the facility look tired or indeed as fashions change, demand naturally falls.
Students might not want to stay in halls for various reasons, perhaps many want a private living room in their own home, a double room with large bed, perhaps they want to have a car and park it near where they live (something which nearly all of the new PBSA does not provide). They might not want to be restricted by the rules enforced by halls of residence.
Furthermore, another factor in the equation is that most have a strict budget for their food, books, socialising, travel and rent.
A look at the figures suggests that halls of residence often charge significantly more than rent for room in a Canterbury house share.
Whatever the reasons, the numbers simply do not bare out the spurious argument that students will choose to stay in PBSA in their second or third years and therefore free up HMOs in the city. The reality is that they could already do so if they wanted.
There also needs to be a greater exploration of the fluid nature of student activity as they adapt to the changing financial implications of a university education.
Evidence from Christ Church, moreover, shows that a substantial number of students are drawn from Kent and south-east London.
Analysis of their home and term time addresses reveals that more are choosing to commute to Canterbury rather than live here, at least for some of their university life.
This may indirectly free up some HMOs as demand falls for student accommodation, but it is unlikely to require additional units of PBSA, because the demand is simply not there.
HMO numbers, though, will likely decline over the coming years for two main reasons, neither linked to PBSA.
Firstly, there is already an oversupply of HMOs which will self-correct: some of those located away from universities are struggling to be let and will probably be sold.
Secondly, and more crucially, the tax changes for income on additional properties being phased in by 2021 will make profit margins for landlords much smaller where they don’t disappear entirely
These two changes are set to deliver a reduction in HMO numbers in Canterbury. More to the point, the proliferation of purpose build student accommodation will be to the detriment of the city and those who live here while failing to address our complex housing issues.
Steve Williams is Conservative city councillor. He lives in and represents Barton ward and works for an investment firm in the City of London.