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

4. Interviews with Key Stakeholders

Introduction

In this chapter we examine the themes emerging from semi-structured qualitative interviews with representatives of the different stakeholders involved in student accommodation and PBSA. Five members of the research team were involved in these interviews working to a common topic guide (see annexe 1) that structured the conversation. In addition, several public sector and government representatives asked to have meetings about their interest in the project and while these were unstructured meetings, they also provided useful contributions that are reported in this chapter where relevant. We also include a focus group of senior UK-level staff from one PBSA provider. The project also had a workshop with the full Review Group in June 2022 to discuss emerging findings and this provided additional material that is developed in this chapter.

Overall, the interviews represented the PBSA as a growing, dynamic and evolving sector within Scotland's university towns and cities. Private PBSA development is a relatively recent phenomenon, but it is now firmly established as part of the fabric of 'student' neighbourhoods and its availability is closely interwoven with the continued success of the Scottish HE sector in expanding and attracting domestic and international students in a competitive international market. Student experiences while Covid-19 restrictions were in place, which were sometimes very unsatisfactory, had shone a spotlight on specific problems within the sector, but interviewees generally welcomed the opportunity to discuss a broader set of concerns that were not specifically related to the extraordinary period of mass-lockdown.

An underlying consideration throughout was that there is anticipated to be continued growth in the demand for accommodation from students, much of which will be met by PBSA.

Keeping up with demand I think is the biggest challenge. There's money waiting and happy to invest, it's seen as a proven sector with proven high levels of occupational demand in the sector. So, meeting that demand and that's not straightforward [because of] the planning system, I mean, the investment capital might be there, but the planning system is never straightforward and there are very complicated issues to deal with along that process as well. So probably very positive in the sense of appetite from, well, firstly universities and students and second from key investors but probably keeping up with that demand …. and then making its way through the challenging development process itself are key challenges. (Scottish Property Federation)

Responding to the Brief

A central requirement of the brief was to 'explore the views of providers, their representatives, potential investors/developers, and wider industry bodies on how PBSA is currently regulated and delivered'. Having assembled a wide body of interests on the Review Group, it was agreed that many of these multiple perspectives could be found either from the Review Group members or from key stakeholders that they could help identify for the research team. This was particularly useful for identifying national stakeholders from trade bodies and national organisations (e.g. Universities Scotland, Colleges Scotland, Association for Student Residential Accommodation [representing providers], CUBO [representing university student accommodation services], Scottish Property Federation, Unipol and NUS Scotland).

The research team interviewed or met with:

• Six Scotland-level representatives (representing universities, colleges, students, PBSA providers, investors and regulatory oversight)
• 10 case study representatives of educational institutions, local government (housing or planning leads) and PBSA providers (2 of our interviewees commented on national and case study level questions)
• Four meetings with SG and other public sector representatives to discuss aspects of the overlap between the project and their interests (e.g. fire safety or the national planning framework)
• A focus group of senior UK level staff offered by one PBSA provider
• The workshop findings of a meeting between the Review Group and the research team discussing emerging findings in late June 2022.

This chapter is largely concerned with HE as opposed to FE. Our interview and background analysis (see figure 2.1) of the FE sector suggests that its student body is often older, in part time employment, living at home and/or involved in work placements. This means with a few notable exceptions (like the Maritime College in Glasgow), the requirement for PBSA is less obvious and where it exists it will be often be more catered for by the HMO PRS or indeed newer market niches like student hotels.

All interviews and meetings took place between March and June 2022. The national-level and local case study topic guides used were agreed with the Scottish Government. We are grateful for the willingness and candour of our participants across the sector. The main interviews were carried out online, recorded and transcribed.

Emerging Themes

We analysed each interview, generating themes that arose in response to the topic guide framed discussions. In this section we work through each theme, outlining the issue, providing a sense of the responses and also sparingly including quotes from the interviews.. In this chapter, we have structured the emerging themes around two main categories: broad issues raised about how the PBSA sector works well or less so; and a series of policy problems and suggestions for intervention.

PBSA Definitions and Ambiguities

Student accommodation is segmented between the traditional HMO PRS and PBSA. In turn, PBSA should be divided between university-owned halls of accommodation (which may be managed or run privately) and private provider PBSA (which may or may not have nomination agreements). This distinction conceptually matters in law since Scottish PRS tenants, including students in HMOs, hold tenancies under the 2016 Act while PBSA and student halls operate under separate common law contracts. This segmentation is important economically for investors, providers and educational institutions, as it is for students. Intervention in one part of the system is likely to impact on the other segments. Arguably, there is often a lack of definitional clarity when PBSA is being debated and political reforms proposed.

Interviewees were keenly aware of the great variety within the sector and were keen that this should be specifically understood when thinking the sector - whether about current conditions within it or considering changes to policy or regulations.

I think the important thing to think of when it comes to PBSA is [that] there's university run PBSA, purpose built student accommodation, and there is also the private sector as well …. I think often when we think of PBSA it's very easy to immediately jump to thinking about the private sector. The modern [examples] can be quite expensive accommodation that has the facilities as well, the gyms, etc, but actually PBSA can also be university accommodation that was built in the 1970s that's very, very different. (Universities Scotland)

I think there's a real challenge for us around the use of the acronym PBSA because in the sector, PBSA is often shorthand for private providers. We don't talk about university accommodation as being PBSA even though it is purpose-built student accommodation. (CUBO)

Importantly, this means that the physical characteristics and quality of PBSA is 'incredibly variable' (ASRA). Additionally, there are a great variety of structures of provision, in terms of investors, developers and those charged longer-term maintenance and management of buildings. Long-term leasehold arrangements (whereby universities manage buildings developed by others) are common. However, this inevitably creates a complex regulatory environment: 'you get similar cohorts of students being accommodated, sometimes side by side in the same residence, but their contract is with somebody different.' (CUBO)

Multidimensional Variability

We have noted above the segmented and variable nature of the sector and it is apparent from undertaking this research that PBSA is highly differentiated. The price and quality of accommodation varies significantly by property age, market segment, location, service add-ons and for different student groups. The student body is also very segmented and there is a range of different economic relationships or business arrangements between the educational and accommodation providers. This underlying widespread heterogeneity means that responses from the Review and recommendations to ministers also need to be similarly nuanced. This variety permeates the consideration of the sector – in relation to development planning and control, regulation and rights, affordability, and so on.

Additional complexity is introduced when it is also recognised that the PBSA can be functionally considered to be part of the broader PRS, which also fulfils much student demand for accommodation. The PBSA is, however, only partly subject to the regulation and control which governs the PRS, although they are interwoven: for example, reductions in the student PRS following Covid-19 has directly led to increased demand for PBSA. Recent trends in Aberdeen were illustrative of the strong interdependencies between housing sectors:

The oil crash happened and then, within twelve to eighteen months, every accommodation provider in the city [was] sitting with massive voids because we lost about ten to twelve percent of the actual population of the city… the transient population that were doing the oil work, they've upped and gone elsewhere. So that …. created in the private rented sector a vast amount of properties that are sitting empty, they just have to get it filled …. in quite nice areas and quite nice flats, they drop the rents down to well under market values, just to get the beds filled because that private owner can't afford not to have that income. So, then it's taking away from university and private providers because that rent's cheaper than this rent and it actually became like a race to the bottom very, very quickly. (ASRA)

However, the different regulatory arrangements encountered within this fluid housing sector can be experienced as inequalities, as strongly argued by the NUS, for example:

'students deserve tenancy rights … kind of basic rights. And that extends into … loads of areas of purpose-built student accommodation. So, students are often dealing with really poor housing conditions actually, … it's a …. complicated process if you ever want to really challenge this stuff. Because you don't have rights, you know there's not tribunals…. You would have to take stuff to an ombudsman which is a lot more difficult. (NUS)

Plurality and Competing Interests

Student accommodation is fundamentally a commercial relationship between providers and their investors and students, mediated in different ways by their educational institutions and whatever regulations constrain that relationship. The general market context is one of increasing demand and growing but lagging supply. Excess demand is seen by providers and investors to be at the heart of rising rents. It is worth remembering that within most university cities in Scotland there are several HE institutions operating in the PBSA sector – including FE colleges - who may each have accommodation earmarked for their own students as well as driving demand into the broader PBSA market. The wide range of actors involved also means that there are competing or plural interests regarding rent levels, quality and variety of the offer, as well the direction of travel of regulations insofar as they benefit one interest at the expense of another. Of course, different interests may also be complementary or functional. This is important when one comes to think about policy recommendations for the sector: should the system be rebalanced to favour one side of the market or, rather, should different, multiple changes be traded-off to address the most egregious imbalances, while not seeking to make the sector's provision unviable for providers or unaffordable for the student body? Achieving this fine balance is an important consequence of accepting the legitimate plural interests of the different stakeholders. Below we consider three dimensions of these multiple interests: new supply; spatial impacts; and, affordability.

(a) New Supply

Developers are seeking suitable land to provide PBSA to meet the growing demand pressures in Scotland. Inevitably this creates additional pressures within the planning system, which developers and investors perceive is felt particularly acutely in land markets already under pressure, such as Edinburgh.

Land costs are exceptionally high and in some areas,….. it's very difficult to secure planning, so we're trying to develop out a sports village at the moment that would house 580 students, but it was turned down at planning, even though it ticked all the boxes from a planning perspective, but it was rejected and we're just about to go back into planning on that. (Edinburgh University)

While from the perspective of the planning authorities, the profitability of PBSA compared to other new build housing created conflicting demands that were difficult to reconcile given an overall shortage of land:

but there is another aspect to it which creates difficulties for us, and that is that essentially operators are outbidding pretty much any other use for land, so whereas in the past even though it might be expensive to acquire land for residential development, that's become increasingly so because PBSA …. have been outbidding residential developers for sites. (University of Edinburgh)

Although planners see demands from students as one of many requirements for development in the city that they need to accommodate, they also suggested that longer term residents felt that PBSA was 'taking over the city' and preferred available land to be allocated to other uses.

(b) Spatial Impacts of PBSA

Students typically prefer locations that are close to their campus and depending on location can be significant in regenerating areas. Interviewees see potential for new areas to benefit from student demand. City centres were identified as possibilities, with the benefit of increasing residential density in the city centre and offering the obvious benefit of proximity to the night-time economy.

But could the Scottish Government think: 'what do we want our city centres to look like in ten years' time'? Could purpose built student accommodation be a part of that to help breathe new life into these areas, and actually it would have huge economic benefit for those regions, and really help support local businesses too if you have an influx of students into that area in a sustainable and manageable way. I think that's the really key thing here that we need to think about, how much we're building and where, but there is certainly the demand for it and there are sites in the city centre Edinburgh and Glasgow (Universities Scotland)

but we need to be quite robust about so what is the plan going to look like and how might we think about repurposing or incentivizing the repurposing of existing locations, not necessarily empty sites, but perhaps empty buildings, certainly above high streets, for example. (CUBO)

Well-placed student developments that takes advantage of existing transport links have the potential to spread the advantages of such developments beyond the traditional neighbourhoods, boosting other areas of strategic redevelopment. However, in the most pressured areas, large-scale student PBSA developments are largely viewed by councils as being in competition with other potential uses, particularly affordable housing. This leads to policies that seek to use planning powers to leverage such provision alongside permission for PBSA. This may also fuel resentment amongst host communities to students living in their midst.

… actually we probably need to question the business model of the universities and stuff. …. If they're expanding by 20 percent ever year or whatever, like is that sustainable? Is it sustainable for the city, can they guarantee students can actually get access to decent, affordable housing and what are the ramifications for the wider communities as well? (NUS)

In the focus group with a major UK PBSA provider, it was pointed out that, while location close to campuses was preferred, there was space for locations further afield as long as it was well connected by good transport links and the accommodation site was well provided for in terms of amenities and activity.

(c) Affordability

PBSA is perceived to be relatively expensive. At the top end it offers relatively luxurious accommodation with on-site amenities (gyms, communal space and facilities) and on-site concierge services. It is strongly associated with the recruitment of international students, especially from China, with the newest developments generally at the top of a hierarchy in terms of price and specification: 'in every city I've been involved in, there is quite a clear pricing ladder' (ASRA). Affordability of student accommodation is relatively difficult to pin down exactly, given the role of parental support for many which supplements available loan financing. However, too strong a reliance on high-end new building also has the potential to exclude students of modest means, in contradiction to other important meritocratic ideals pursued by HE. We return to affordability below.

Student Choices

How do students fare in this mixed provision of accommodation? Are there still clear, standard accommodation pathways through the student career and do they now have more choice or do they feel constrained? Are there evident missing market segments? Investors and providers told us that there is a shortage of entry level lower cost accommodation and that investment has been increasingly at the upper end and to an extent targeted at the international market.

Some interviewees felt that the spaces offered in student accommodation were fairly standard, with little provision for those whose needs might be more specific. Interviews identified developers as important in raising standards and expectations through high standards in new build developments – they are keen to be seen to have innovative and interesting architecture and provide market leading levels of service. In contrast, though, there was a sense that many students did not want such high-end (and expensive) provision and that there was a gap in the market for a more prosaic option, adequate and functional, described as the 'premier inn' model:

But what we have seen every year up until this year, is that there is a real demand for non-ensuite accommodation, and of course, when people leave us after their first year, generally they're going into a set up where you have to share your loo and sometimes people are living in the living room…. So, the PBSA mantra about only ever banging up standard boxes, or en-suite accommodation, we really struggle with. Pollock, one of our most popular properties has no en-suite at all, it's all shared facilities. So, we struggle a bit that the expectation becomes that students that (a) this is what students want, and (b) that everybody can pay for en-suite accommodation. It's not the case. (University of Edinburgh)

This was echoed by providers who also pointed to other ways of diversifying the choice available in student accommodation

So, if I think about the cities that I work in [ (named provider )says] "There's a hundred beds here, it's not frills, you'll get a bed, it'll be good quality," as in you'll be comfortable, everything'll work and you'll pay whatever it is a week and that's all you're going to get out of this. So, it does exist, but I think there's also a marketplace for almost like a student hotel…. I know they're building one in Glasgow at the moment, but it's not traditional accommodation, it's more allowing the students somewhere to go where if I'm only at university one or two days a week, I can do my one or two days a week, go off home elsewhere and then the next student can come in and the way that the 2016 Act was written, that would be very difficult to house in a traditional PBSA provider. (ASRA)

we think that the quality of PBSA sector is probably, in places, too high. The sector could do with what we've termed a Premier Inn style product that would be comfortable enough, with no frills. People would know what they were going to get. It would be safe, from a health and safety point of view. (Unipol)

Local Issues

Our interviews provided a sense of the local dimension – where student housing is both a priority and problem for local people and stakeholders alike; where there are active measures being developed to either introduce planning gain requirements regarding affordable housing as part of new PBSA planning applications, or where councils are actively seeking to grow their relationship with the sector to facilitate housing strategies on the ground.

Especially in the light of the PBSA synergy with, and fluidity within, the PRS for student housing, it is very difficult to compile comprehensive local data that would present a full picture of existing provision or provide a sound basis for future planning. While this affects provision overall, it is of relevance in identifying and providing for students with less mainstream needs, such as those with disabilities or family responsibilities, for example. The absence of comprehensive data particularly of the student experience was a cross-cutting theme that was aired by many and in different contexts.

Students are a large part of the rental market and so we would expect changes in student provision and relative costs of accommodation to have wider market consequences. Is that the case in practice? Traditional HMO neighbourhoods were likely to be studentified to an extent, with pros and cons associated with that sort of process of neighbourhood change. However, the advent of significant numbers of new PBSA projects also changes our local areas through population movements, the night-time economy and other services. PBSA may also be crowding out other forms of housing, e.g. affordable housing. Moreover, planners and strategy teams need to work with universities and providers to look at different ways of locating and connecting new developments. For all these and other reasons, student accommodation should not be conceived of in a vacuum but is in fact an important player in the wider housing market and spatial economies.

Purposes of the Review

The PBSA Review arose because of formal commitments in both the Programme for Government 2021 and Housing to 2040, in response to among other things, the Covid-19 lockdown and concerns about student welfare. There are cross-departmental interests at play (housing, HE and FE) but also town planning and economic development, among others), as well as the plural set of interests in the PBSA and wider student accommodation sectors. These interests are all brought sharply into focus by the debate surrounding the future of the 28 days' notice period brought in during the pandemic lockdown and only finally suspended in July 2022.

In this part of the interview we asked both what was the purpose of the Review and also what they expected it to deliver. It is striking just how wide or broad the range of concerns that the Review can or could cover. Investors and providers were concerned that political risk of new legislation may deter investment in PBSA at the point when growing demand is requiring more nominations to help meet guaranteed places.

What I would like to see come out of it is a really fair and balanced appraisal of the situation as it stands. I fear that part of the driving force is to try and create an even better deal for students, that in itself is not a bad thing. We're all here to help support and provide that service, but it can't come at any cost. I'm not sure how well understood the reality is that the provision of accommodation within institutions certainly, and in the private sector, but for different outcomes is a fundamental part of a wider ecosystem. So, the money that we generate in Glasgow, for example, from our accommodation, goes back into helping to balance the university's books. But the misconception that it's all about profit, and then it's all about a bottom-line number in and of itself just isn't true. (CUBO)

Given the national scope of many providers, some wanted the benefits of consistency across UK regimes to be considered:

I'll be keen to see the review look at if there's a case for any particular bespoke adaptation of some of those national UK wide codes into a Scotland specific scenario. …there's different ways of doing things in regulatory terms of course, it kind of suggests that there's a need anyway but many of the operators are operating right across the UK, and many, I think, have gotten behind the national codes because they've seen the need for some strong industry guidance on how it performs. (SPF)

Further there were arguments made suggesting that students do not need the same rights as others in the PRS:

We have made representations that we believe students should be treated separately from the rest of the private rented sector and that's because mainly, they don't require the same security of tenure that other people do. (CUBO)

The highest profile single issue that respondents raised were around the merits of increasing tenancy rights in the PBSA and allowing a notice period equivalent to the PRS. While interviewees were supportive of improved rights, they also emphasised the costs that would be incurred.

The extension of the 28 days' notice period …. do we actually need it now? You know, why are we keeping it in place because, one, the cost of it being abused is high and it's very easy to abuse i.e. if you wish to exercise your right to leave, you have to have a Covid reason for leaving, but you don't have to share your Covid reason and nobody's allowed to ask you for it. So it's actually a nonsense. It's basically just you can give 28 days' notice for any reason at all. (CUBO)

…it was last year [during Covid-19 lockdown] I had to do a piece of work for them to say how much money that we'd lost and I know there was something like £X million of loss …. and rooms that we could not relet to anyone else and then where …. and it was things like, "Well that refurbishment work thing that we were going to do in that building we now can't do because we can't afford it. (ASRA)

As would be expected, the NUS argued forcefully for the principle that students, as tenants, deserved the same rights and protections as other tenants. Students are profoundly impacted by the power imbalances inherent in the landlord/tenant relationship:

it's a totally, totally unregulated system and students are basically just at the sharp end of it (NUS)

It was argued that these impacts underpin a clear case for improved rights:

The basic things of having the right to protection from eviction, the right to compensation, the right to complain and, as we said, the right to give notice on your accommodation as well as in a permanent right. As we've said around the cost as well, to be subject to rent controls as well in whatever form that takes. So … some sort of regulation of those rents, particular I think as well with students involved in that rent setting process, I think that's an important thing, …. we're kind of desperate, actually, for just students to have some sort of basic rights. (NUS)

Affordability and Value For Money

The survey evidence from NUS Scotland and from Unipol confirms, in a limited way, the widely held sense that there are students struggling to meet accommodation costs, who are financially stretched, as well as a distinct but related question about whether the housing costs that students incur offer value for money. This is a critical issue. In this sense, it is striking how little we know about either the proportion of income students pay out in housing costs in different student accommodation circumstances, or how much income is left for non-housing essentials after paying for student housing. In the context of planned rising demand for students and hence accommodation, it is a genuine worry that the sector knows little precisely about how affordable its housing costs are. We return to this priority issue in the final chapter recommendations.

The NUS would like to see increased student consultation and input into rent-setting. While there is policy debate currently about introducing rent control into the Scottish private rented sector on this Parliament, only the NUS expressed a demand to see more formal rent-control mechanisms introduced within PBSA. Universities argue that their rents are set on a cost basis (rather than with explicit reference to market rates) and they don't make profits beyond what is needed to reinvest and maintain existing provision. Nonetheless, many note affordability problems and that these should be addressed (but by different mechanisms).

I think the sheer demand and the fact that there's been more demand than supply frankly has its inevitable consequences in the market to a certain degree.….So, I think as we would say with wider elements of the real estate market I think the concern for us is being able to supply enough to make sure that there's enough choice demand for students, which should ease affordability questions, but I think it's getting harder because I think planning is frankly just getting harder in certain hotspots. (SPF)

Well, I think there's clearly evidence of people getting into financial trouble. The reality is, with a lot of PBSA and has been for at least five years, if not more, that this accommodation is being paid for by parents. So, in terms of the affordability side, it's generally because parents understand that the product is expensive, on the whole, those who can afford it will have taken the view that they're actually going to pay the costs of that accommodation. (Unipol)

providers and Unipol say that rents are benchmarked against their competitors rent increases rather than by cost inflation or other indices. Is this sensible or desirable in an accelerating inflationary environment? So, even pre-Covid there has been an awareness of a growing shortage of student accommodation in Scotland. That has been exacerbated somewhat by Covid… (Universities Scotland)

Segmenting Students – Covid-19 and the 28 Days' Notice Rule

The 28 days' notice to quit rule is a key issue for Ministers and the stakeholders interviewed. It sits at the cornerstone of the business model adopted by PBSA providers (they operate 39-44 or even 51 weeks contracts and would find it very difficult to fill vacancies once the academic year had begun). At the same time, the Scottish Government is looking to apply its universalist approach to human rights to housing, in terms of common legal rights across the private rented sector – and that would imply the same 28 days' notice period in PBSA as well as in the HMO PRS (as currently exists). Understanding and addressing this question acceptably is a major element of the Review. Scottish Government evidence stated that the 28 days' notice period was well used by students, at least initially. At the same time, we note that the Unipol 2022 Scotland briefing (p.15) observed that there was little conclusive published evidence about the extent to which students made any use of the right to use the 4 weeks' notice period, and whether this was in any sense excessive.

There were strong demands for a 28 days' notice period from PBSA tenants and the NUS, in line with what is available in the PRS. This issue was highlighted during Covid restrictions (when students were encouraged, or even required, to leave accommodation) but its proponents (especially the NUS) argued that it is a basic right for all tenants to be able to give notice.

A key countervailing argument is made by the universities that rests on the interdependence of the student offer and the availability of accommodation for successive cohorts of new students. This is argued to be practicable only if universities are able to manage vacant possession at the end of the academic year. Others argue that this is indicative of an important distinction between the ability to make a home in the PRS compared to occupying student accommodation, where only the former is dependent on strengthened tenancy rights. Further it is noted that the restrictions that require PBSA to be let only to students reduce the freedoms to let more flexibly and therefore justify having different tenancy rights within PBSA. It is also argued from multiple supply-side perspectives that rents would have to rise to address the risk or uncertainty of voids.

…. the big problem for students for the Scottish PRT is that you have lifelong security of tenure so that would make it impossible for institutions to be able to guarantee the supply of new accommodation for new students. I mean, this is a situation where that changes every year …. So, there is a requirement for institutions, particularly for first year students, to provide accommodation and that was always the problem and the reason for the exemption from the wider PRT. (SPF)

…I know there has been recent discussion about the success of the 28 day notice period that should that be retained by the university sector, that should be so fundamentally damaging for the universities to have people just up sticks and walk out from a financial perspective, but also from a wellbeing perspective and support perspective, to have people, who are [a source of worry] …. to dance off into the sunset not to be seen again would be really difficult. (University of Edinburgh)

Part of the real difficulty is if the no fault clause disappears, at what point does the tenancy end? Because ultimately, we need to clear our beds every year to make space for the incoming students……………. If we have people who malinger year on year, at what point do you draw the line? And we need to know how many beds we've got available to play with so that we can honour the students that are coming in. (University of Edinburgh)

Regulating PBSA

A key policy area is the regulation of the student accommodation sector. Presently, there are regulations in the form of HMO licensing (largely about the buildings safety and quality) and the accrediting Unipol national codes (covering about 2/3 of PBSA units across the UK) concerned more with management, service delivery and provider and student relationships. This is a voluntary code but one now set in legislation. Providers we interviewed noted that university nomination agreements also carry rights of further inspection/regulation by the academic institutions. A particular area of concern from the provider's perspectives is that if they operate in more than one council area in Scotland and can face hugely varying fees for HMO licenses and there is no obvious justification for large differences in this key fixed cost.

At the same time, there is pressure for further regulation arising from the experience of Covid-19 lockdown but also because of new intervention pressures emerging from the housing reforms associated with the Scottish Government's plans for levelling-up housing rights. At the same time there are a wider array of regulatory pressures: health and safety, consumer rights, town planning approvals and building control, for instance. How well do current arrangements work and what if any reforms are required. Another important issue is the extent to which the core regulations are sufficiently devolved in Scotland.

Many commentators see the existing arrangements as adequate, although the NUS deals with cases where conditions are poor and is concerned that the limited powers available for students to seek redress. Students appear to have limited routes to appeal or seek redress against their accommodation providers.

'We're looking more at day-to-day management issues. This is not the type of physical standard issues that HMO licensing would cover. This is about how the providers deal with the students living within them, on a daily basis. So, we've added in, fairly recently, some standards around health and wellbeing, that set some benchmarks for what they need to be doing, in terms of providing information and sharing information with universities, where they've got nominations agreements with them'. (Unipol)

The current regulatory system within Scotland, and it's the same throughout England and Wales, doesn't really fit with PBSA accommodation. Looking at local authority [HMO] licensing, for example, it addresses some of the health and safety issues, which I think are already there within these buildings. These are new buildings. They're ones that will need to meet particular requirements set by planning, for example. We also don't think local authorities really understand day-to-day management of blocks of student accommodation. They're okay about looking at fire alarm systems but these buildings have fire alarm systems. What we're not able to adequately address, we don't think, are some of those challenges of management. (Unipol)

The other bit, thank God we've got HMO. Actually, HMO takes away a lot of the heat on that, because if your HMO inspector turns up and you haven't done all your repairs, you haven't done it to standard, you risk losing your licence. I think that is a huge part of the Scottish market as well, that we've almost got this, almost like this regulations …. that are double checking that they're operating in the way that we should be. So – for example – [we are] absolutely confident there is no dangerous cladding So, as soon as Grenfell happened, there was a huge response from the universities to make sure, as University of Edinburgh)

But HMO helped out a huge amount in that, because we were able to evidence, you can't have a licence unless you've got a robust fire risk assessment, unless you've got a good fire detection system, all these things that are measurables. (University of Edinburgh)

PBSA Futures and Towards a more Joined-up Sector

We asked stakeholders how they imagined likely future scenarios evolving for the sector, as well as future risks. Of particular interest concerns the capacity for the plural competing interests we have identified to work together better in the future in a more joined-up and strategic sense. PBSA occupies a rather nebulous position in development planning. It is housing in a functional sense, and future demand growth can be predicted to some degree in consultation with university partners. However, in strategies for future housing – it is not explicitly classed as 'housing'. The provider focus group made a strong case for student housing as an explicit part of a council's housing requirements (not least because of the wider local economic benefits of PBSA in terms of jobs and night-time economy, etc.). They also linked this joined up nature to their concerns regarding affordable housing provisions entering PBSA planning permissions in Edinburgh (and possibly elsewhere). The investor and provider interviews also noted that joint working can at times be hampered because of the impacts of constraints like GDPR.

Other more minor anomalies occur reflecting local differences in the way that student accommodation is treated, from the hugely varying cost of acquiring HMO licenses, to whether the rubbish generated is treated as commercial or residential waste.

It's something that we've written into our recent submissions to the National Planning Framework for saying there needs to be assessments in local development plans of future intentions for PBSA markets and so on and that clearly means that you have a requirement for a several way split really. I mean, if you look at local authorities representing the local communities, as they're intended to do in the round, institutions and the private sector for PBSA, there should be some sort of common working between those three sectors .... So that we have a decent near term idea of what will be required accommodation wise. (SPF)

We have an interest as a statutory housing authority in understanding planning for the current and future needs and demands that are generated through people arriving to study at higher education institutes within Glasgow. We also have a specific role as the planning authority which is to determine the need for bespoke accommodation to meet identified needs, and to apply the development plan policies in relation to that. Recently the council approved new supplementary guidance for its development plan in relation to student accommodation and purpose built student accommodation where it can be located and what factors need to be considered in relation to that and one of the key components of that is being able to balance the housing needs to meet the demand, the supply to meet the demand from the students but also to consider the impacts on the neighbourhood areas and the wider areas and how that is distributed across Glasgow. (Glasgow City Council)

As with most cities, Glasgow's universities are concentrated in particular areas and there is a natural gravitation of students to want to seek accommodation within those areas as well. Part of the challenge is to consider how well that's balanced within the wider needs of the housing system, and also to see whether there are opportunities as well, particularly Glasgow is pretty well served with transport connections and hopefully in the future will be even better served with transport connections with ambitions around upgrading the public transport system and the Glasgow Metro concept that is currently going through the national planning framework. (Glasgow City Council)

Other Issues

Finally, there are a limited set of significant wider issues that do not fit well into the other themes. One of these concerns is that there are relevant things going on outside of the case studies for this project and what we can learn from different situations, such as the volatility of the Aberdeen rental market. A second issue concerns thinking more about the role student housing can play as economic investment to help grow and sustain rural communities. A third element is the relationship between housing strategy and planning with the PBSA sector. Inevitably, the research had to make decisions about included areas and those excluded and there was extensive consultation with the Review Group over these choices. Nonetheless, there is much to be learned from other locations within Scotland.

Aberdeen has a big concentration of PBSA accommodation, as you may know. It's also, I think, and was the case about five years with the private rented sector, where there was a big surplus of houses because of what was happening with the oil industry. So, we were hearing situations of students being able to rent some quite luxury accommodation because of the lack of other bodies coming in. I suspect that's probably changed now and the industry's now back to where it was and there's less availability…. But I get a sense that there may well be some shortages around Aberdeen, as it recruits. (Unipol).

The key point raised in discussions with HEI on the rural and islands side was that student demand accommodation in different parts of the Highlands and Islands; not just to boost the HE/FE sector but to help sustain communities by retaining more graduates (hence the wider interest in housing and delivery). So, the focus was less about PBSA as it was regarding the important role that student housing and access to local PRS could have to support HE, economic spin offs and community benefits.

Practical examples included the Heriot Watt campus in Orkney (and, separately, at the Borders college), the marine centre in Oban, and the fact that there is new build student accommodation underway in Inverness. The Orkney example is a cross institutional economic/spinout investments (with Robert Gordon University, Heriot Watt University and University of the Highlands and Islands). They noted the problem with converting properties into summer lets which is less possible for the growing PGT market where students may need accommodation for 12 months. More generally there is a case for working with new models in the rural or islands setting e.g. one HEI enthused about an example in Denmark, where there is creative use of buddying where the student spends time with an older person providing care.

Key Messages

• Proposals from stakeholders to address affordability problems included those who argued for Scottish Government increasing funding for students or other approaches e.g. bursaries, but also others who stressed the need for much better evidence on student costs and resources, to help quantify and address affordability properly.
• There was considerable support to encourage the supply-side to develop more midrange, more affordable accommodation (and not rely on older, depreciating student accommodation to provide lower rents).
• Regulation and the 28 days' notice period are the sharper areas for different views held strongly by student bodies in opposition (to different degrees) to the supply-side (providers, investors and institutions).
• A key question from this chapter for the Review to consider is to what extent can and should Scotland move away from the present situation where anomalies of treatment for PBSA student accommodation exist and for which different constituencies and policymakers argue for and against maintenance of the status quo? Is there, instead, a balance that can be found which does not undermine the fundamental business model or the educational objectives of the HE sector, and at the same time does not lead to narrowed choice and unaffordability for growing numbers of students? We return to this in the final chapter.
• There is no requirement for HMO PRS to tell the local landlord register that lets are for students, creating difficulties in fully understanding the size and range of student accommodation as a whole and particularly via the HMO private rental market. The information and evidence problems we have identified within the PBSA segment apply, in different ways, across all student accommodation.
• On redress – nomination agreements are a good way potentially to ensure student complaints about private PBSA are heard through the educational provider input. We note the discrepancy between a more sceptical NUS and other stakeholder views regarding whether the forms of redress are adequate and sufficient, or in fact whether students either do not really understand how they can seek redress and in what circumstances.
• Dundee/St Andrews, Glasgow and Edinburgh universities have all frequently exceeded their targets for guaranteed places and usually in the hundreds per year. This a worrying situation given the tightness of the student accommodation market and the inevitably delay between identifying an investment opportunity and getting new supply available to students. In between times, universities are obliged to be creative and look to different often sub-optimal solutions to meet their guarantees to students.
• Overall, there is a majority supply-side view of defending the system as it largely is (e.g. returning to the pre-Covid system of not having 28 days' notice periods) or proposing incremental change only for areas like accommodation mix, achieving affordability and regulating PBSA. The NUS Scotland minority view is that private sector is highly deregulated, is often very expensive, that there is some poor quality and poor practice, and a sense that it is not clear that redress works effectively and certainly not consistently.