Univ of Portsmouth Re-Opens Langstone Campus
At a Neighbourhood Forum meeting in Milton this month, University of Portsmouth Director of Estates and Campus Services, Tahir Ahmed outlined plans to bring nearly 250 student rooms back into use at their 'Langstone Village' campus at Milton Locks in the city in an attempt to ease the student housing crisis which sees students commuting to Portsmouth from as far as Leeds this year.
History
From 1962 when the then Queen Mother officially opened the site until the summer of 2018, the Langstone Campus site provided a home for many thousands of students and sports facilities for the whole university. However, times changed and when approval was obtained to demolish the older properties in 2019, the University stated, "The demolition site will surround the three-storey QEQM accommodation block and the student restaurant facilities. The buildings are beyond economical repair and there are concerns they will be used unlawfully. Access to the newer buildings, East, West and Trust, and Barnard Tower, will remain."
The university statement added: 'Student accommodation at Langstone campus closed on July 31, 2018 as students chose more popular and modern university halls and accommodation provided by external companies in the city centre and Southsea.' Another driver for the decision was that it allowed the University to remove the expensive to operate bus service between the Langstone Campus and the main city centre sites – however this benefit was immediately lost when small landlords highlighted the many students living in houses along the route who used the service, who would be looking for nearer accommodation should the service be removed.
As a result, the bus service was retained but instead of running a straight route between the sites, it was replaced by a looped route around Southsea – if introduced a decade earlier it could have resulted in a more even spread of student housing around the south of the city and less demonisation of student HMOs, however, by the time it was finally introduced, small landlords were already leaving the sector in droves because of the anti-landlord posture of the local council in response to the paranoia toward perceived densely packed student HMOs shown by local residents.
What Changed?
Sadly, by trying to be low key and not get involved in local policy – presumably in the hope of keeping local residents sweet, the University are largely guilty of creating the challenges they now face.
Up until 2005, the University had a small number of rooms in student halls and the rest of the student community lived in houses in the city. This worked well with 'good years' for student recruitment being accommodated by a switch from non-student to student tenures in the local private rented sector and in 'bad years' the switch would be in the other direction. In this way, the local rental sector had the fluidity such that the University never had to worry about accommodation for students as there always seemed to be enough.
Things started to change in 2006 when large, shared houses of 3 or more floors needed to be licensed. As always in these cases, each change was minor and when management is left to operational teams and no one takes a strategic view, the implications go unnoticed. The big impact of the 2006 change was that the fluidity in the market became restricted to the smaller shared houses as those which required a licence were less likely to be switched between tenures than those which did not.
The next 2 changes were unrelated – firstly, to compete with other Universities for 1st year under-graduates, Portsmouth needed more student halls spaces and better ones (Langstone was dated and unpopular already 15 years ago). The Uni had built many of its new halls in the 1990's and, presumably to shift the risk to 3rd parties and to free up capital for teaching buildings, all new blocks from this time onward were privately funded. We have shared our concern about purpose built student accommodation (PBSA) funded and developed by real estate investment trusts (REITs) before – see here. But the real issue for the University was that the REITS had a business model that went after the top end of the student market – the same segment the Uni wanted to keep for itself and did nothing to support the larger target segment of less wealthy students.
We sat through several Planning Committee meetings where representatives of the University made delegations against new halls as there was, in their view, already enough 'top end' accommodation and what was needed was more, more affordable, accommodation. This subsequently proved to be true when, rather than reduce their prices, some of these private providers tried to switch their 'student only' accommodation into the local 'holiday let' market as that was the only way to retain the high income their business model depended upon. More detail here.
The issue, which neither the University or the City Council understood at the time was that as each new hall was built, flexibility was reduced in the local rental sector as homes which could switch into and out of the sector as demand changed were being replaced with halls built and suited to only one purpose. There is a whole other debate about the money that came into the city with students and which was spent in the city by small local landlords now going straight to the halls providers and never entering the local economy at all.
The second major change which has affected this market significantly was the introduction of Portsmouth's 'Article 4 Direction' in 2011 limiting the density of HMOs. This was in response to the rapid growth in student dwellings in Southsea (with an overall population of 60,000 – adding 15-20 thousand student residents had a big impact and locals objected strongly). The article 4 and subsequent regular increases in the amenity space and standards required by Portsmouth Planning in an HMO have severely restricted the introduction of new HMOs where they are needed and has increased costs for those who live in them. But the real impact has been the complete removal of fluidity from the local rental sector – no longer can tenures change to meet demand and any change in demand can only be accommodated with the provision (or removal) of specific types of accommodation, which we all know, can take several years to implement.
Situation Today
The University of Portsmouth competes with around 160 other institutions for students – they can invest in shiny buildings and sexy courses and recruit star staff, all of which potentially increase the share of the pool of students at the expense of other institutions. However, this costs a great deal of money and returns can be quite short term – it is much easier to maintain your share and hope the pool grows, or better still, look elsewhere to increase the size of the pool from which you recruit.
In 2000 there were around 700,000 18-year-olds in the UK, this rose to around 830,000 in 2010 and then dropped back to 700,000 in 2020 but is projected to rise to nearly 900,000 by 2030. Although the number of 18-year-olds dropped by 16% between 2010 and 2020, this was balanced by the increase in participation in higher education – rising steadily from around 2M students in 2000 to 2.7M in 2020. Thus for 20 years from 2000, the University saw reasonably steady growth in student numbers with few if any issues in housing them. More recently, Portsmouth has found it difficult to reliably fill its courses (and more importantly, generate the revenues it needs) so it has increasingly turned to the international market (5,700 of the current total of 31,000 students at Portsmouth are international) – and remember international students pay considerably more for their courses than UK students so the revenue proportion will be much higher.
Similarly, the focus on post-graduate courses has increased – we are told that over 1,000 masters degree students enrolled from abroad in January of this year.We have written on this phenomenon before, as many of these students came with family members and hoped to 'double up' (or worse) in HMO rooms as that was all they could afford. Bringing in students from Nigeria and India (as happened in January) in large numbers helps swell University coffers, but if no regard is paid to the fact that these students are typically in their late-20's or early 30's and come with family, it is not surprising that we hear so many horror stories and so frequently have landlords asking what they can do as their licence conditions are breached and no help is forthcoming from PCC.
Bringing a few rooms back into service in Langstone Village which are only suited to single person use is not going to address the fundamental problem which is that the University has consistently stayed out of local housing discussions and tried to stay neutral, the lack of active management of perceptions or positive involvement has led to residents resisting students in the community which itself has led to councillors imposing ever tighter strictures on student letting – with the end result that what was once a fluid and thriving local market of perhaps 4,000 HMOs is now down to the 1,400 (mandatory) Licensed HMOs (the bulk of which are not let to students) and maybe as few as 600 small HMOs. (The University estimates that 500 HMOs have left the Portsmouth market since the decision to introduce Additional Licensing, our data suggests that figure is nearer 1200 – which even if all are 'small' HMOs, is a loss of around 4,000 student rooms in the city). The 'buffer' which was able to handle any change in the market has gone at a time when other tenures are so desperate for accommodation that prices have eroded any premium obtainable from going the extra mile to house students.
What Should The Uni Have Done?
Sadly, higher education planning is very short term – no university knows more than 6 months in advance whether there will be a cap on numbers of UK students in the coming year, whether visas will be easily available or not at all for foreign students and this is before you factor in how much marketing spend will be required to achieve the target new enrolment numbers.
It may be unfair to say the University could and should have planned better as they themselves never knew how many rooms of each type would be needed next year, let alone 5 years hence.
However, it is a business and it does have an objective to grow which has it has been successfully achieving over the past 40 years – so to assume that growth could be accommodated without any investment in ensuring the local housing market could accommodate it was foolish. Hindsight is a wonderful thing, but if the University had pushed for more halls while finance was cheap or argued against restrictions on HMOs as they were introduced, they would not be in the position they are in now. Instead, they have avoided confrontation with residents and sat back while councillors demonised HMOs - now they have very few options.
Going forward, the University will either need to consider ways of getting flexibility back into the local market (unlikely in the next 5 years given that Additional Licensing only started in September), ensure that new halls rooms are available as they are needed (and none are being built at present which implies no growth for the next 3-4 years) or restricting numbers. I am sure none of these options will be appealing, but unless something changes accommodation problems will only become worse. The University has a responsibility to the local community to contribute and help solve local issues - not to ignore or create problems - it will be interesting to see whether they rise to this challenge and take their share in the growth in student numbers over the next 7 years or not.