On student housing, DfE just doesn’t have the heart

Rents for Purpose-Built Student Accommodation (PBSA) have risen by 18 per cent over the past two academic years, and 14 per cent of Purpose-Built Student Accommodation rooms in London now cost more than £20,000 per year.

It’s not just an issue for home students. Let’s take a moment to remember that the amount that international students are told to have in the bank to cover their living costs will, as of January 1st, match that inadequate figure of £13,348.

The report is called “Priced out?”, but there’s little evidence of that. Instead we end up with rich students having a lovely time “unlocking their future” in a city “where every corner holds a new adventure”, while the poor commute to campus from astonishingly long distances, or live illegally in rooms with other students.

There’s a collection of essays in the back, and fair play to HEPI – it includes all sorts of “quiet part out loud” contributions. Sam Bailey Watts, a “Director, Consultant and Advisor” at FRAH Consulting, says that PBSA providers have focussed on trying to match the residential experience to what satisfaction surveys have been telling them students want:

…responses to the value residents say they attach to a more developed community feel have spawned cinema rooms, gyms, study areas and numerous initiatives led by halls staff.

The other thing that the surveys say is that students want cheaper rooms. But, according to Bailey Watts, that issue will not be solved without greater university engagement:

Private investors and operators will always want to “make hay while the sun shines”, as one said to me recently. If demand is there, why would a private interest curb its increases if it feels it can achieve full occupancy at a rent level considered too high by a university?

Yeah! Why shouldn’t we gouge on the maintenance loan of the poorest or the wealth of the Global South!

As Rebecca Shafran, who does “alternative markets” research at BNP Paribas Real Estate commented in July:

Student accommodation really is the darling of the alternatives sector at the moment and is set to outweigh other living asset classes over the next 12 months. It offers a long-income play with strong operational performance and a track record which investors in the beds sector really value. We’re seeing shortfalls in stock across some key university cities alongside attractive pricing which can be tapped into.

Recent analysis has shown that despite falling applicants, the level of headroom in the UK student market is wide with applications exceeding university capacity consistently over the past nine years, suggesting applications can fall without impacting student numbers.

See? Even if some students are priced out, their profits can grow and grow.

This is clearly a scenario that needs a plan. To accompany the story, the quote from the Department for Education (DfE) spokesperson is as follows:

Our plans for higher education reform are fixing the foundations to deliver change for students. To break down barriers to opportunity for young people who want to attend university, we are increasing maximum loans for living costs for the 2025/26 academic year by 3.1%, in line with the forecast rate of inflation, so that more support is targeted at students from the lowest income families.

Yes. Nothing says “breaking down barriers to opportunity” like responding to above-inflation increases in costs by increasing financial support by inflation, and even then not actually doing that because the number of families entitled to that amount is falling every year thanks to the parental contribution threshold.

But it’s the next part of the quote that really rankles.

We recognise the concerns of some students about the availability and cost of accommodation…

Well that’s good news.

…and expect universities and private landlords to ensure their provisions are affordable, fair, clear, and promote the interests of students.

If that reads like an odd sentence, it’s because it objectively is. If it feels toothless and pointless, it’s because it objectively is. But if you feel like you’ve read it before, that’s also because you objectively have. It’s like that photo – once you’ve seen it, you keep seeing it.

It was a confection first used (and one that made more sense) in the middle of the pandemic, when then Chief Secretary to the Treasury Steve Barclay responded to a question on students not being able to afford their rent with:

We encourage universities and private landlords to review their accommodation policies to ensure they are fair, clear and have the interests of students at heart.

When it later emerged that DfE was asking students to stay at home rather than take up the room they’d signed for, then universities minister Michelle Donelan said:

This has been a very difficult time for students, and we encourage universities and private landlords to review their accommodation policies to ensure that they are fair, clear and have the interests of students at heart.

In the Lords, Lord Parkinson of Whitley Bay clearly wasn’t keen to look like he was specifically thinking of students:

This has been a very difficult time for students, as it has for everyone, and we encourage universities and private landlords to review their accommodation policies to ensure they are fair, clear, and have the interests of students at heart.

By March, asked about rent relief on student accommodation, Donelan repeated as follows:

We encourage universities and private landlords to review their accommodation policies to ensure they are fair, clear and have the interests of students at heart.

And again in May. And again in June. And again the following January. In February, Baroness Barran re-used it for a question on racism in halls:

We encourage accommodation providers to review their policies to ensure they are fair, clear and have the interests of students at heart. There should be no tolerance of any form of racism.

Andrea Jenkyns (HE minister for less than 30 seconds) re-used it for a question on homelessness:

…we have always encouraged them to review their policies to make sure that their accommodation policies are fair, clear and have the interests of students at heart.

By January 2023, Baroness Barran was re-using it for a question over availability:

We encourage universities and private landlords to review their accommodation policies to ensure they are fair, clear, and have the interests of students at heart. This includes making accommodation available at a range of affordable price points where possible.

The following month universities minister Rober Halfon was askew about student loan value in the context of housing costs. Guess what he said?

The department encourages universities and private landlords to review their accommodation policies to ensure they are fair, clear, and have the interests of students at heart. This includes making accommodation available at a range of affordable price points where possible.

Same again in March, July, September, October, November and December.

In the fact the only change with the new government is that they’ve dropped the word “heart”:

The department expects universities and private landlords to review their accommodation policies to ensure they are affordable, fair, clear and promote the interests of students.

A couple of months ago, DfE minister Janet Daby did say that they were “working with the Ministry of Housing, Communities and Local Government to promote the importance of a strategic approach to meeting student housing needs to providers and local authorities”.

No sign yet of whether that is an actual plan to tackle an acute wicked problem, or a vague attempt to pass the parcel around the departments.