The growth of the private student housing market has seen rent on some studio flats for students costing as much as £355 per week, with a new Camden development at the forefront.
Last year Unite, the UK’s leading operator of private student accommodation, unveiled its newest property in Camden, the St Pancras Way flats, where studio apartments are let to London students at as much as £1,500 per month.
Developments such as these are springing up across the capital leading to concerns from the GLA Housing Committee that student digs are being replaced by luxury pads.
In a meeting of the Committee to discuss the issues with London’s student housing market, Marcus Roberts, head of student investment and development at Savills explained that government policy on higher education led to a huge rise in student numbers and consequent demand in housing.
“The market has changed markedly really since 2000,” he said.
“There was a shortfall of accommodation that couldn’t be provided by the universities to meet that demand and it has carried on increasing over the past few years.”
The meeting last month came days after the announcement that foreign investors pumped £670 million into student accommodation on a single day in June. While they made investments all over the UK, the vast majority were in the capital, making up 36 per cent of the total figure.
Unite, who is a key player in private student accommodation up and down the country, had a 22 per cent stake in the recent investments, and they also manage the multi-investor fund that bought the properties.
“We do try exceptionally hard to offer value for the students. It’s really, really important for us,” says Richard Simpson, managing director for property at Unite Students.
“But there is an obvious tension in trying to set up student accommodation in London where property is so pricey. We do tend to see that we will be more expensive than your typical HMO [shared house] as we offer a product that is more modern and attractive.
“It’s not economically viable for us to compete at a lower level.”
Looking around the St Pancras Way property I can see why the price is high. It’s a massive, open-plan space, with bright, clean furnishings and friendly staff.
There are over 500 beds available, and the kitchen and bedroom I view are well equipped with smart finishings and, surprisingly for a student room, a three-quarter size bed. It’s the type of place I would have been more than happy to live during my student years.
Large roof terraces provide views of London, and Sarah Dixon, the member of staff showing me around the property, tells me of the raucous parties that were thrown until Unite, who seem generally tolerant of the student lifestyle, were forced to stamp down. There’s a games room with table football and a ping pong table, and a “chill-out” room, which holds a fair selection of books and large flat screen TV.
Because accommodation is for students at University College London (UCL) there are more modest deals available within the property than the £355 apartments, but while the university does subsidise the rate, the cheapest on offer is still pushing the £200 per week mark.
Ben Foreman, a 19-year-old philosophy student at UCL and London editor of student newspaper The Tab, moved into the St Pancras Way flats last September, paying a subsidised fee of £208 per week.
He explains that he wound up there after filling out a preferences sheet where he said he wanted an en suite. Foreman enjoyed his time at the accommodation but says he would have equally preferred to live in other halls.
“There were far more international students in my halls than elsewhere I think, particularly from China who – given that they’re paying about £20,000 a year tuition fees – could probably afford the extra few quid a week more than most,” he says.
“Living that centrally was great though. If my friends came down from their northern universities they’d always come in to Kings Cross or Euston which was only a 15-minute walk away, so that was nice. As for Camden, it was cool saying ‘I live in Camden!’ and the Snapchat filter was a bonus.”
Foreman adds that he believes the problems with student housing stem from a deeper problem with London house prices generally, suggesting that Boris Johnson should reduce student costs elsewhere; perhaps in the form of a free public transport subsidy for students so they could live further out of the centre.
It’s true that London property prices seem to be on a permanent upward spiral with prices having risen by 7.3 per cent since last year according to Nationwide. But, although it seems that generally student accommodation prices are reflective of the areas in which they are based, it is arguable that developments from private companies such as Unite are adding to the issue.
“I completely believe that luxury student flats are aggravating the problem with housing,” says Leah Francis, welfare and international officer at UCL’s student union.
“In so many meetings with accommodation they have defended their prices or quality in that they are still not as expensive as the luxury flats when they shouldn’t be looking at the luxury flats as an example of affordability.
“They should be looking at actually how much money students have to spend. We get so little off the government to support ourselves that it doesn’t seem like the university plan their rent prices against that.”
In February Francis commissioned a survey of UCL’s student accommodation and the St Pancras Way flats’ worst attribute was deemed to be its affordability, with one student calling it “expensive and very profit based/exploitative”.
At the close of the GLA meeting Colum Maguire, the National Union of Student’s vice president, discussed the need for policy changes in London to help regulate the purpose-built student accommodation market.
“There is the opportunity to do something really special here,” he said.
And while Unite’s properties are undeniably good quality, it’s clear that a really special solution that will work for all parties is just what’s needed.
Would you expect to pay over £1,500 per month for your student digs? Let us know in the comments or tweet us @hamhigh_property
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here