Student housing: the trouble with university towns

University towns can suffer from what the tabloids call “studentification”, which irks locals. But, in fact, a student population boosts the local economy, especially the private rented sector, writes Lawrence Higgins  “Spew-niversity” yelled the Sun; “Sick, snogs and supermarket trollies” shouted the Daily Star; “Degrees of drunkenness” proclaimed an outraged Daily Mail after freshers’ week. With tabloid tantrums about students’ antics becoming more commonplace as excessive behaviour irks resident populations, it is often difficult to understand why towns remain desperate to attract undergraduates. It is a case of numbers, but that doesn’t mean that local residents’ grounds for concern are unfounded. Universities UK estimates the higher education market to be worth around £73bn a year. Take Stoke on Trent, the UK’s 11th poorest city. The National Union of Students estimates that £250m a year is generated from the city’s two universities, so the importance of students to its economy is obvious. Or take another example, the University of Birmingham, which creates more than twice the combined amount generated by the West Midlands’ eight professional football teams and the £1bn the DUP received for supporting Theresa May’s government. It is around £200m less than the contribution Queens and Ulster universities make to Northern Ireland. As Greg Oldrieve of Vickery Holman in Truro says of Falmouth University, which contributes around £60m GVA to the town: “People complain about students but the truth is, a university is a game-changer. Every other major development in Cornwall is irrelevant compared to the impact of Falmouth University.” It is not antisocial behaviour that rankles residents but general “studentification” – the process by which neighbourhoods become dominated by student occupation. Cardiff University research found that the phenomenon has a fundamental effect – positive and negative – on the economic, cultural, social and physical environment. One of the key economic effects comes from students spending their estimated £13,000 (according to Experian) disposable income in their locality. A town that hosts a popular university will offset the losses of undergraduates leaving home to study elsewhere. Centre for Cities research found the most popular destinations such as Leeds, Sheffield and Nottingham have a net gain of around 30,000 students each year – a direct boost to their local economies of around £390m per annum. Two of the UK’s most deprived towns, Blackpool and Wigan, which between them have a net loss of around 11,500 students, could probably do with the £150m spending that leaves their university-less towns each year. Student cash can transform a city’s development appeal. James Butcher of Banks Long & Co says: “Traditionally, Lincoln lagged when it came to its high street offering. But the university’s expansion and the thousands of students means national and niche operators are establishing themselves in town.” Direct spending is just one part of the economic impact of a university. UUK found that every £1 generated by a university will create £1.35 in the wider economy, and for every 100 people employed directly by a university there will be an additional 117 jobs generated elsewhere. Butcher feels that Lincoln’s major regeneration programme, centred on the leisure and retail-led Cornhill Quarter, would not have been viable were it not for the success of the university. However, for many towns that have inflated undergraduate numbers without firm foundations, there may be issues ahead. EY research predicts that under current application and acceptance ratios, changing demographics will mean a cumulative drop of around 218,500 18- to 19-year-olds attending higher education over the next 10 years. This shortfall is expected to be exacerbated by a drop in the number of overseas students following Brexit and a rise in those taking apprenticeship degrees. EY says while universities with the calibre of those in the Russell Group may be exempt, many newer expansionist establishments already operating under tight margins may struggle. It may not be just students who are hoping that Jeremy Corbyn and his free education policy gets elected. Case study: Falmouth University Readers of The Sunday Times voted Falmouth as the UK’s best place to live, while the town’s independent retail and leisure offering put it in top place in the Great British High Street Awards. The Sunday Times puts much of this down to the unprecedented success of its university. Greg Oldrieve of Vickery Holman in Truro says: “The three most influential things in Cornwall over the past two decades are the Eden Project, Rick Stein’s expansion and Falmouth University – and the university sits at the top.” The renowned former art college has more than doubled its students to around 5,000 in the past eight years, and plans to expand to 8,000. The university has a massive cultural and economic impact on the town and its 22,000 inhabitants. Oxford Economics research found the college injects £58m a year into the economy of what is one of Europe’s most deprived regions. The university directly buys goods and services worth £18.8m a year from local suppliers, while students spend around £16m supporting 390 local jobs. Just parents visiting their offspring is worth around £750,000 per year. This is being further boosted by Launchpad, a graduate business incubator for digital start-ups. By 2020 it is expected to have created 32 companies generating £2m in dividend income to the college. But the expansion plans have prompted some locals to revolt. Following fears over rising studentification and housing being given over to houses in multiple occupation (HMOs), there was a push for more purpose-built student accommodation (PBSA). So the town and county councils have had a rethink about a number of sites earmarked in Falmouth and adjoining Penryn, where the university is. The council has 15 planning applications for PBSAs and HMOs on its books. If they went ahead, Falmouth would be in the top five PBSA provisions in the country. Under pressure from concerned residents, the councils have delayed agreeing to the proposed expansion until the university can provide acceptable accommodation proposals. However, Oldrieve feels the issue is not the provision of student housing but unrequited demand for commercial property. “We have just done a deal for a robotics company that grew out of the university, and another that sells wind turbine technology to Scotland. There is big demand for commercial grow-on units and tech hubs,” he says. Graduate retention schemes Many universities run schemes to help retain graduates. These include: Graduate Advantage in the West Midlands helps SMEs hire graduates World of Work at Liverpool John Moores University provides feedback from 400 firms on the skills they require Knowledge Transfer Partnerships (UK wide) brings universities, businesses and graduates together to offer work experience and jobs Coventry, Cranfield, Warwick and Loughborough universities offer an MSc in vehicle engineering designed with Jaguar Land Rover Graduate Commonwealth Fund in Glasgow funds 50% of first-year graduate wages The Plymouth Graduate Internship Programme offers financial assistance for paid internships The Manchester Graduate Talent programme sources graduate-level jobs The fine art of graduate retention Attracting students is difficult; retaining them and persuading talent to come to you after they finish degrees elsewhere is even trickier. Centre for Cities found that two of the most successful graduate destinations (after London) were Sheffield and Leeds, with respective retention rates of 29% and 30% against the national average of 15%. The Local Government Information Unit encourages local authorities to invest in leisure provision to persuade graduates to remain in situ. Guy Gowing of Arnold Keys in Norwich says the University of East Anglia’s impressive retention rate is helped by Norwich’s savvy leisure operators, who offer year-round attractions. Also vital is a housing market that offers somewhere acceptable to live and a transport system that allows students to get around easily. Philip Woolner of Cheffins in Cambridge says: “Cambridge house prices are 16 times the average salary. “What is most important is providing the transport infrastructure from the outlying, more affordable areas that allows people to get to their jobs easily.” However, the key to keeping and attracting graduates is the creation of highly skilled jobs. Take Swindon, for example. It may not come up in many lists of top nights out, but opportunities from Honda means it is attractive to graduates. James Butcher of Banks Long & Co says: “Lincoln was struggling to keep the students and their £250m of spending. That’s why we built the science park. It’s those types of jobs that will keep them here.” Student housing: the facts Housing is the key issue raised in studentification, with students as private rented sector tenants causing concern in many communities. Philip Woolner of Cheffins in Cambridge says: “There is resentment as family homes have become HMOs, forcing communities from their neighbourhoods.” This has led to a push for more purpose-built student accommodation which, in turn, has created its own backlash. Laura Gardner of Miller Commercial in Truro says student PRS developers are outbidding most other proposals as they can fit more units into less space and have fewer parking requirements. Knight Frank estimates that nine of the UK’s top 17 university towns have reached or surpassed the saturation rate of 40% PBSA provision for students. After a period of leniency, many councils are now rejecting PBSA applications for fear of further increasing the studentification of their town centres. Woolner says that in response to increasing concerns in Cambridge, the council undertook a study to determine the best response and it decided PBSAs were the optimum way to get traditional housing stock back into market, but development should be restricted to specific areas. Guy Gowing of Arnold Keys in Norwich says PBSAs are often beneficial to the market because they use locations that traditional residential developers will not consider, such as plots next to bus stations. His colleague Robert Flint says student housing conversions have removed much of Norwich’s secondary office stock. Photo © Geoff Robinson Photography/REX/Shutterstock