If affordability issues can be overcome, not only will it benefit a great number of young people, particularly domestic students, but the reputation of the sector will be further enhanced and the creation of a completely new level of product offering will allow for significant expansion.
Affordability is not a new issue, but in a sector that has grown and evolved beyond recognition in recent years it is perhaps understandable that other matters have been foremost in the discussions around student accommodation. However, at this year's conference, even before the last two sessions of the day looking at affordability in detail, enough had been said to make clear that this issue is rising up the list of priorities for all parties interested in the sector.
There could be many reasons why the timing is now right for affordability discussions to increase in importance: a reaction to the recent publication of the mayor's new London Plan; because certain locations in the UK are now considered 'full' of premium purpose-built student accommodation (PBSA); the unknown impact of Brexit on future student numbers; or possibly a combination of all of the above. Regardless of the reason, these discussions seem certain to continue.
Some may point the finger at the private sector for the current lack of affordable rooms available. However, as was said at the conference, it is worth bearing in mind that without the private sector's involvement over the last four or five years in particular, we would be facing a housing crisis in the sector.
We heard many interesting suggestions throughout the day about how to tackle the affordability issue, but it is clear that there is no one silver bullet. A real solution will only be found if universities, developers, investors and other stakeholders work together to attack the problem from all sides. Some of the suggestions that were put forward include:
Modular and off-site construction can shorten build periods and reduce the risk of delay, thereby delivering cost efficiencies in the development phase.
Smaller rooms, perhaps without the requirement for a desk, 'twodios' or studios with shared bathrooms can all generate construction and operational cost efficiencies.
Service level optimisation
As anyone who watches Location, Location, Location will know, if you ask someone to set out their wish list it will almost always stretch beyond what they can afford. Student accommodation is no different, and thought should be given to what students really need and, by using data analysis rather than focus groups, what they actually use.
By being willing to commit to nomination agreements, leases or other forms of partnering with the private sector, universities can help private sector operators to mitigate the lettings risk. In return, operators will be able to reduce rental levels.
Planning restrictions and tax policy could be changed to make it easier for student accommodation to be let to any kind of user outside of term time. The additional income generated could then be passed back to students through shorter term lengths and/or reduced rental levels.
Planning contributions could be softened in return for commitments on affordability.
With recent developments over vice chancellors' pay and issues around tuition fees rarely being out of the press, it feels like the right time to tackle these points to keep the student accommodation sector healthy and viable. However, the sector can only operate within the art of the possible. Making studios affordable will always be challenging, while constructing almost any kind of PBSA at rental levels comparable with HMOs (houses of multiple occupation) is impossible.
Anthony Newton is a private sector student accommodation expert and Victoria Goddard is a universities expert at Pinsent Masons, the law firm behind Out-Law.com.