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10 points to note on today’s report on student accommodation costs – By Nick Hillman

  • 26 October 2023
  • By Nick Hillman

These 10 points summarise the comments made by Nick Hillman, HEPI Director, at the launch of the interim Student Accommodation Costs survey in central London this morning.

  1. I am going to start with the most important thing I have to say, which is to note the fantastic contribution of the Unipol Chief Executive, Martin Blakey, to conversations about student accommodation over many decades. I have learnt more from Martin than from just about anyone else in the UK higher education sector. When he retires, we will miss his wisdom, his warmth and his willingness to work with people across the sector, including those with whom he may not necessarily see eye-to-eye. Martin’s work on the Codes, which drive up standards, is just one very clear example of how he has never lost sight of the needs of student tenants. I hope, even in retirement, we will continue to benefit from his sagacity.
  2. I am delighted that the organisation I work for, the Higher Education Policy Institute, is publishing today’s report with Unipol. It is in a long line of HEPI papers on the issue of where students live. For example: in 2018, we published a paper by David Maguire and David Morris on commuter students; in 2019, we published a history of student accommodation by William Whyte; and, in 2020, we published a bumper study entitled Student Accommodation: The Facts by Sarah Jones and Martin. We have also published a series of influential blogs by Martin and others and we publish our own data, such as the HEPI / Advance HE Student Academic Experience Survey broken down by the housing choices of respondents.
  3. The whole Report being launched today reflects the fact that neither maintenance nor rent have been going up as fast as inflation. Over the two-year period covered in the Report, from 2021 to 2023, there has been a 5% increase in maintenance support and a 15% increase in rent. But both are below the increase in RPI of 23%. So rent is going up three times faster than maintenance support, but inflation is going up almost five times faster. Policymakers cannot ignore the basic facts of life for ever.
  4. The currency of policymaking is killer facts and there are some standout killer facts in today’s new report. Most notably, the continuing increase in the proportion of maintenance support going on rent. On average, in England (for someone living apart from their parents and studying outside London), rent now absorbs: 76% of the maximum maintenance loan received by students from the poorest households; 100% of the average maintenance loan; and 163% of the minimum maintenance loan received by those from better-off families.
  5. If anyone thinks this should be accepted as normal, I urge them to look at Wales, where the average rent in Cardiff is only 57% of the support that every student is expected to receive. In Scotland, things are complicated because of the complex interaction of means-tested grants, loans and the parental contribution (and because, as with Wales, there is only one local city in the survey). But as an example, the average rent in Glasgow – a higher cost city – eats up 84% of the maximum grant and loan support but also 125% of the minimum grant and loan support. So it really matters if parents are making the contribution expected of them or not. Yet there is little official information available on how much they should be paying. 
  6. We surely now have to recognise what we have long known: maintenance support levels are dire. If it were solely down to me, I would uprate the maintenance support package properly with inflation, including some backdating; I would then seek to rebase the level of maintenance support, using the long-awaited new Student Income and Expenditure Survey or other robust data; and, in England, I would reintroduce maintenance grants for I do not like the fact that we expect the poorest students to emerge with the biggest debts. We should also have an honest debate about why we cannot have the Welsh system unchanged. Those who would like the Welsh system picked up and plopped down in England need to engage with the issue of Barnett consequentials, which means Wales gets more spending per head than England. So we may need to ask, what can England learn from Wales without lifting their system wholesale?
  7. If you Google, ‘what proportion of my income should go on rent’, you immediately come across the 30 per cent rule, which states ‘you should try to spend no more than 30% of your gross monthly income on rent’. If we accept that the proportion might appropriately be a bit higher for students, who are not in full-time paid employment, and also in some cities, then perhaps it might sometimes be reasonable to spend around half of your income on rent, but the much higher figures we have found still seem inexcusable. In short, students do not have enough money left over after paying for their accommodation to cover all their other costs, such as travel, food, clothes, and learning materials, let alone a modest social life.
  8. Figure 24 on page 36 about affordability is very striking. Only one-quarter of private providers and, more surprisingly perhaps, under one-half of universities are currently ‘innovating in the area of affordability (for example, new design, stock types or tenure)’. The only words I disagree with in the report, however, are the words about promoting doubling up, or putting two students in one room more often: in the end, we all resort eventually to anecdotes about our time in education and, in my first year, I shared a room and hated it (despite having slept in dormitories from the age of 8 until 18)! If others are happy to accept it, then fine. But I don’t think anyone should be routinely expected to double up because we have not had the hard conversations we need to be having.
  9. As anyone who has been on the HEPI website in the last fortnight will know, we have been marking the 60th anniversary of the most important document on post-war higher education policythe Robbins Report of October 1963. The Robbins Report is as interesting on student accommodation as it is on almost everything else. The Robbins Committee were strongly in favour of students living away from home and wanted a higher proportion of students to do this. However, there has actually not been all that much difference between then and now. Robbins found four-in-10 (43%) full-time university students were in private lodgings – according to one recent survey, the figure today is just 3% higher at 46%. Robbins found one-third (32%) of students were in purpose-built student accommodation, the same proportion as today. Robbins found one-quarter (25%) of students were living at home, again not much dissimilar to today (15% ‘with parents’, 4% ‘own property’ and 3% ‘other’). As I have said before, there is no such thing as a new educational policy question…
  10. On last week’s Wonkhe Show, I heard someone say ‘people who argue against student number caps have not addressed the housing issue in a satisfactory way … they seem to think that housing will just magically spring up’. That is not right and this report is the answer to that challenge. I oppose number caps and I back this report’s practical proposals for improving maintenance, for increasing the supply of beds and for putting a new focus on the accommodation available for less well-off students. It is possible to have more students and more student accommodation, just so long as we are prepared to follow the evidence; indeed, I would argue it is imperative that we do so, given the rising number of 18-year olds. In the end, this is no longer a division between right and left, it is a split between liberals who want more students, with more accommodation to house them, and those who think ‘the gentleman in Whitehall really does know better’ how many students we need and how many student beds we should have. This is the great higher education debate of our times – just as it was at the time of the Robbins Report – and, in the forthcoming crucial election year, we must not let it go the wrong way. Not for the first time, the NIMBYS are wrong.

Other recent HEPI output on this topic includes:

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