Purpose-built student accommodation (PBSA) and student housing: research

2. Introduction

This report is the main output from a research project commissioned in January 2022 by the Scottish Government. The research was commissioned to inform the work of the Purpose Built Student Accommodation (PBSA) Review Group, who have been tasked with the development of a Student Accommodation Strategy for Scotland. PBSA is defined in the next chapter. The research was carried out by a research team from the UK Collaborative Centre for Housing Evidence (CaCHE), along with colleagues from the University of Cardiff and Rettie and Co. The introduction begins by briefly setting out the context or background to the study. This leads on to the outlining of the aims, objectives and key questions for this research. The approach taken by the research team is set out alongside the key decisions made in designing the research methods adopted. Finally, the introduction describes the structure of the report and the chapters that follow. The report provides information and key points to consider for the PBSA Review Group when making recommendations to Scottish Ministers on a Student Accommodation Strategy for Scotland.

Background to the Study

Several factors explain the recent increase in concerns about student accommodation in Scotland, focusing on the more recent phenomenon of PBSA. The first of these is the increasing demand for student accommodation arising from growing student numbers, especially among Higher Education (HE) students and, specifically, rising numbers of international students. Universities often offer a guarantee to new students that they will be housed either in student halls or via a nomination agreement with private providers of PBSA. As numbers anticipated and planned continue to rise, there is evident greater pressure on these modes of provision, as well as the more traditional HMO PRS. This helps explain why several universities are struggling to meet their guarantees and are reconsidering their portfolios of student halls and the extent to which they act as direct provider or in partnership with the private providers. These factors put pressure on development planning land use decisions and how local authorities perceive their housing strategies for higher density neighbourhoods close to campuses, as well as the future of the wider private rented sector.

A second driver is the wider private rented sector in Scotland. When the new private tenancy arrangements for Scotland were legislated for in 2016 (The Private Housing (Tenancies) (Scotland) Act 2016), after a decade of regulatory change in Scotland culminating in open-ended tenancies, finite and reduced means of repossession by landlords, and a 28 days' cooling off period for tenants at the start of tenancies. It was agreed that students living in university halls or private PBSA would be exempt from this legislation, and that they would continue to be housed under a common law contract with the provider rather than a legal tenancy. However, students living away from home in the HMO private rented sector would be covered by the new tenancy arrangements, creating a division in rights and law depending on what form of accommodation students choose (or can access). It is widely accepted across the sector that, because of the new tenancy and the experience of Covid-19, private landlords are now moving away from that market and looking for more long-term tenants with less chance of void periods. Initial qualitative evidence from Glasgow (Gibb, 2021), as well as from sources interviewed in chapter 3, suggests that this shrinking of the student HMO sector is putting upward pressure on rents.

Third, the Covid-19 pandemic and lockdown created an awareness of the significant challenges facing students in private PBSA and student halls in terms of isolation and mental health. Many students stayed away and took courses online remotely. The Scottish Government introduced temporary measures under the Coronavirus (Scotland) (No. 2) Act 2020, for instance, giving all students 28 days' notice to quit (recently suspended). This in turn has put pressure on the business model of PBSA providers, which works on the assumption of undergraduate students taking a 41-44 weeks' lease (and postgraduate taught (PGT) is often 51 weeks).

Figure 1.1 sets out an initial schematic representation of the drivers of student accommodation in Scotland and how they may interrelate with each other. Two-way arrows indicate plausible two-way relations. The diagram is inherently multidimensional and helps us to recognise the complexity and multiplicity of student accommodation issues. This is also why analysis needs to work with the fundamental interconnectedness between traditional private renting and University-led and private PBSA. This interdependency is why we consider student accommodation in the round in order to better understand PBSA.

The 2020-21 Programme for Government described PBSA as a 'high-profile policy area' and singled out the need for a Review stating that:

In the context of the significant growth in purpose-built student accommodation and COVID-19, we will conduct in 2021 a review of purpose-built student accommodation, in partnership with stakeholders. This will be taken forwards in parallel with work to ensure rent affordability and improving standards across the Private Rented Sector.

Student accommodation is also central to the ongoing reforms to the wider rental sector, as part of the sector-wide implementation of Housing to 2040.

The Review is a broad-based government led working group drawn from the wider student accommodation sector. The Review gathered evidence for a short scoping study in the latter part of 2021 (discussed later in this report) but the plan was always to commission independent research to provide the evidence and analysis that would support the Review.

Aims and Objectives

The overarching research aim was to gather evidence to inform the review of PBSA. In concrete terms, the research would seek to:

• Explore students' experiences of choosing, living in, and the affordability of, PBSA.
• Understand the differences in experiences among students and between halls of residence/PBSA and private rented sectors.
• Explore the views of providers, their representatives, potential investors/developers, and wider industry bodies on how PBSA is currently regulated and delivered.
• Understand the barriers for providers in providing good quality and affordable student accommodation.
• Identify domestic and international examples of good practice in delivering student accommodation.
• Identify any other critical issues additional to those raised in the scoping study.
• Gather and provide research evidence to inform the Review Group's recommendations to Ministers.

Study Approach and Methods Adopted

The research was made up of three discrete elements:

• Evidence review based on both academic and grey literature including industry reports and research, plus analysis of contemporary analysis published by Unipol and NUS Scotland.
• Stakeholder perspectives – a series of qualitative interviews with a range of stakeholder perspectives, many of whom were selected from the Review Team. These interviews worked to a common semi-structured topic guide.
• Student perspectives – qualitative student interviews across a range of characteristics totalling 45 interviews working to a common semi-structured topic guide.

In delivering these research instruments, several key methods decisions were taken (further details are set out in the relevant chapters):

• For practical reasons, students and a subset of stakeholder interviews were selected from three case study areas (15 students per area). Recognising the non-quantitative or representative nature of qualitative research, this implies choices having to be made that will exclude some places or specific areas that some may feel should be included.
• While there was consensus that two case studies should be Glasgow and Edinburgh, there was much debate about the third and with the Review team we agreed to explore Dundee/St Andrews as the third. Such a decision precludes other candidates (in particular, Aberdeen and a rural/islands choice). We have included discussion in each of the areas not chosen in different parts of the report.
• A short online screening survey was developed, incentivised by a prize draw. More than 900 students responded. The survey collected background and equalities information, as well as exploring students' experiences of accommodation. The survey also asked if respondents would be willing participate in a longer qualitative interview, enabling the recruitment of 45 student interviewees.
• Interviewing students in this way raises specific ethical issues. We may expect issues of distress with interviewees, even if they are willing consenting respondents to the initial request. Consequently, the research team designed the interview to minimise issues of distress and implemented sensitive countermeasures should such issues arise. The team also excluded anyone younger than 18. The project was granted ethical approval by the University of Glasgow College of Social Sciences and included further ethical assurances for the commissioner.
• As part of the interviews with stakeholders, the team agreed with the Review Group that it would be useful, reflecting the variety of issues that PBSA and student accommodation impinge on, that further meetings be convened to discuss, for example, the new national planning framework, fire safety concerns and rurality.

Report Structure

The rest of the report consists of five further chapters. The first of these is the evidence review (chapter 2). This is followed (chapter 3) by the qualitative interviews with key stakeholders, both representing national perspectives, and drilling down into the three case studies. Chapter 4 and 5 examine the student perspectives drawing on both the screening survey results and, principally, the qualitative interviews. Finally, chapter 6 concludes with a set of specific key recommendations.