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What Is Happening With Student Accommodation?


It will be several years before we can stand back and understand the impact of the Covid-19 crisis on student housing in the city, but in the short term we can use recent planning applications to identify some of the immediate effects. 

We don't know what student numbers will be like going forward but we hear that the University have investigated 'worst case' scenarios where students do not return to face to face teaching until September next year – yes, 2022! So what is going on and what should you do if you have empty property?  

What Is Happening? 

There are obviously already empty properties and these are being repurposed for other tenures, but interestingly there is more Planning activity enlarging existing HMO's than there is converting them for alternative use.

The private student halls have been badly hit – they were always a risky investment, lacking the scale of the big halls or the patronage of the University and typically being outside the magic circle of appeal around the Guildhall Square / Town Station they would be the first to suffer. We have recently seen 3 apply for a permanent change of use from 'student hall' to 'interim homeless accommodation' (unfortunately much needed in the city partly due to the high rents in the city partly driven by the excessive requirements PCC place on HMO's). These are the Registry and also Kingsway House and 155-157 both in Elm Grove.

In the same period, we have seen 7 smaller HMO's request C3/C4 status – this allows the landlords to let to a family without losing their ability to let to students or other sharers in the future. Most of these are around Fawcett Rd or further out – so understandably the more distant HMO's will be the most likely to drop out of student usage during a contraction.

However, to balance this we have seen applications for 15 smaller HMO's to be enlarged and although a number of these are in the 'ladders' east of Somerstown, many are in the same roads where we have seen C3/C4 applications: Jessie, Talbot, Percy, Fawcett, etc. 

Our Suggestion..

So, what can we conclude? Without knowing the individual properties, it is hard to be sure but we can say that student halls are suffering and the smaller ones with the least resources have already dropped out of the game. In the HMO space, standards are rising so those with the wherewithal are upgrading and enlarging their properties to take advantage of this (as the article 4 stops them creating new HMO's) and those without are tiding themselves over by letting to families until demand returns.

One space that appears to be overlooked, is the conversion of HMO's to flats. If recent anecdotal experience is anything to go by, many students start off as a group of 4 or 5 and after a year, decide they would rather live in smaller groups. I have lost count of the number of my tenants who have asked if I have anything available with 2 or maybe 3 bedrooms.

Obviously a small HMO with 4 beds squeezed in will be a challenge, but many 3 bed terraced houses are ideal for conversion to 2 flats which will allow you to focus on the demand, maximise the return on the property without  over-development which narrows your available market, it also takes you out of HMO regulations completely and gives you the option to freely switch between students and couples without issue.  Do let us know how you are addressing this issue.

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