A new lower-cost purpose-built student accommodation (PBSA) model, which would include smaller “pod-type” rooms of just 10 square metres (including an en-suite), could help alleviate the UK’s student housing crisis according to a new Higher Education Policy Institute (HEPI) report.

The proposed lower-cost PBSA model is outlined by Martin Blakey, former chief executive of student housing charity Unipol, author of the HEPI paper, Student Accommodation: The State of the Nation in 2024. In the paper, Mr Blakey argues that in the UK, where rental costs can consume a student’s entire maintenance loan in some locations, there is an urgent need for lower-cost PBSA. This requires a different type of operating model with lower levels of servicing:

In addition to pod-type rooms, other features of the proposed affordable PBSA model include:

  • Smaller buildings of 300 to 350 beds, to optimise running costs.
  • A usage-based ‘adjustable energy supplement’ aimed at encouraging better use of energy.
  • Overnight security only or a partnership approach to security with a university’s security services.
  • Communal space would be provided on the ground floor for lounge and study areas (especially important when rooms are smaller).
  • Clusters of 12 to 20 flats around a central kitchen/communal area.
  • A mixture of room sizes and facilities within each building with rooms priced accordingly.

Mr Blakey also suggests that this type of lower-cost PBSA, could reduce rents by 25-30 per cent, is also likely to be of interest to students who are not as worried about overall university living costs but would prefer to pay lower rent and allocate their resources to other things. For this reason, Mr Blakey says the risk of “ghettoization” of poorer students is low.

The HEPI paper cautions, however, that a new PBSA model requires a different approach to partnerships:

For a low-cost model to be developed, there has to be an acceptance of no up-front payments being paid by developers because these simply result in higher rent levels. The gain for the developer on a lower rental development model would be an agreed financial return based on ‘open-book’ accountancy and the gain for the educational institution would be some lower cost accommodation for its students. If the use of university land was part of any arrangement, then the university and developer could reflect that in a longer term equity share with the university having first right of purchase on any planned disposal at the end of the term of the partnership.”

Martin Blakey, author of the report, said:

‘Student housing is an educational issue. If you cannot find safe, accessible and affordable accommodation, your learning suffers.

‘We have gradually reached a position where the current student accommodation model is not working well for many students. Factors such as higher interest rates, increased regulation and a changing pattern of higher education are all affecting the student housing market.

‘The time has come for a new approach, with more innovative provision and more sensible regulation alongside a more sustainable regime for student maintenance support.’