Council claims oversupply of student accommodation is ‘mythical’

Nottingham City Council has responded to criticism that the city is becoming overcrowded with student accommodation by saying that, actually, demand is outstripping supply.

The Council says there is the assumption that many student flats are standing empty and that every other planning application given the go-ahead is for student flats.

The Council says it has surveyed of all the main providers of new student accommodation in Nottingham and the figures have revealed a vacancy rate of just 0.5% in 2017/18 – the lowest ever recorded and representing just 105 bedspaces out of a total of 22,000. This, it says, is despite a further 1,000 new bedspaces becoming available for the academic year 2017-18 – none of which were reported to be vacant.

Portfolio holder for planning and housing, councillor Jane Urquhart, said: “We know there’s a perception that there’s too much student accommodation and more can’t possibly be needed. But actually, we can see we are only just keeping pace with demand. Vacancy rates in new student flats have remained consistently below 2% for the past four years, with no signs of that changing as student numbers continue to rise.

“Our position has been to encourage purpose-built student accommodation in the city centre where other residents might not choose to live but students want to be. We can see that this is reducing the concentration of students in some parts of the city and frees up housing that’s arguably better suited for families and other residents.

“Even if we wanted to, we couldn’t refuse planning permission for student accommodation without a sound policy reason – and some land may be suitable for small units and flats but not for family housing. It’s also clear that students are part of the life-blood of our city centre, with new student accommodation giving disused buildings and the areas around them a new lease of life.”

However, according to one city agent, the explosion of student accommodation in the city could have a detrimental legacy.

Jonathon Seddon

Jonathon Seddon, director at NG Chartered Surveyors, said: “Whilst I have no issue with the student developers who are just seizing an opportunity that’s been presented to them, the explosion of student schemes, and particularly the number of office conversions, has created a huge legacy issue for the city.”

Seddon told TheBusinessDesk.com that the majority of Nottingham’s office stock is typically older properties constructed in the 1960s/70s which, as a consequence of no longer meeting the market’s expectations, would gradually decline in the rental and capital values they are able to command. This would, he said, continue until a tipping point was reached and it becomes economically viable for the owner to redevelop the site the property sits on with something contemporary that would command a premium rental and capital value.

Seddon added: “What’s happened now is that many of these buildings have been converted to student accommodation and, due to the high rental and capital values they command, they have been given a further 30-40 years of valid economic life, and that will effectively block the availability of development sites.

Jonty Green

“We’ve now got student schemes in converted 1960s office buildings overlooking the Market Square, the very heart of the city, and that’s plain wrong. These are the sites that are now effectively stagnant, whereas as a city, we should have been honing and polishing them, with the assistance of the Council’s planning control mechanisms, to provide the city we all want to live and work in.”

Despite this, the head of estate agent at FHP Student Living Jonty Green, says there is “no bubble about to burst”, adding: “The increase in student numbers to the city has created the need for more accommodation to be built. We have astonishingly low vacancy rates. These figures truly demonstrate an appetite for this type of accommodation, breeding confidence from local and global investors, truly establishing Nottingham as a well ranking university city to rival cities Newcastle, Liverpool & Manchester.”

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