The 2021 London Plan has failed to stimulate the delivery of affordable purpose-built student accommodation in London, according to research by CBRE and QX Global.
Since the plan was launched, consent has been granted for just 3,100 affordable beds. These consents equate to providing rooms for less than 1% of London’s 400,000+ full-time students.
CBRE and QX Global’s research has found that an estimated 105,000 students are facing an accommodation shortage.
CBRE and QX Global said that development viability and the complexity of the planning system are both stifling delivery. If all schemes in the pipeline included the London Plan’s identified proportion of affordable rooms, there would be just 7,600 affordable beds earmarked for delivery to the market. However, the market is currently seeing even less than that – around 5,800 affordable beds.
The shortage is forcing students to seek other accommodation options, including in houses of multiple occupation, where rental prices have increased substantially owing to HMO stock shrinking by 23% in the last five years.
Kirsten Dyer, director, living valuation and advisory at CBRE, said: “The numbers are compelling and it is clear that delivery of both affordable and market rent PBSA is far below the levels required to support London’s domestic and international student body.
“The target of 3,500 rooms per annum is not being met, not enough universities are engaged in the issue, and a restricted group of developers dominate the market because of the challenges the London Plan now presents.”
David Tymms, strategic adviser at QX Global Group, said: “Adopted with the best of intentions, the London Plan has failed in its mission to deliver meaningful growth in new market rent and affordable student beds in the capital.
“The complexities of the planning process, alongside viability challenges, have driven many developers out of the market and only the largest universities appear to be equipped to engage. With just 3,100 affordable rooms consented to date and a tightening HMO environment, the prospects for lower income background students seeking to study in the capital look set to remain bleak for some time to come.”
Image © Unite Students
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