Nottingham Council, this week, have issued a statement saying that the City is short of 5,500 student rooms.
The Council is hoping to avoid a student housing crisis, but the situation looks bleak for students but presents an opportunity for HMO investors. Nottingham’s director of planning is confident they can avoid a crisis as the Universities there are currently developing the largest amount of student accommodation outside of London.
In 2015 the Government lifted it’s cap on the number of students on intakes for each academic year. Since then both Nottingham University and Nottingham Trent University has seen around a 30% increase in students that require housing from 2016 to 2022.
The Universities are currently in process of developing out 10,000 student beds but it is believed that that still isn’t enough to fulfil the demand.
Paul Seddon, director of planning and regeneration at the Council had a lot to express on the matter. Mr. Seddon has ambitions to ensure every student coming to study in Nottingham has a bed space in a purpose built scheme.
Article 4 in Nottingham means that the creation of HMOs between 3 and 6 beds, which normally is permitted development, has been restricted and requires planning permission. This has exacerbated the issue.
Mr. Seddon said that the policies in place have been deliberate in order to support the new developments.
“The reason we’ve been able to hold that line is because we have aimed deliberately in the policy to support the new purpose-built,” Mr Seddon says.
Mr. Seddon went on to admit that if they aren’t able to development the right number of units then that will increase the demand for shared accommodation in 2 bed flats which should be used for alternative tenants to students.
Both universities, in a joint statement, say they are working collaboratively with the council to “ensure Nottingham realises the many socio-economic benefits that students bring without putting pressure on the city’s housing stock”.
Mr Seddon says he is “as confident as I can be that we will avoid what has happened in some of the other cities more recently”.
But Giles Inman, of landlord association EMPO, fears Nottingham may one day be faced with an over-abundance of student blocks, with little scope to change their use, as he claims has happened in the past in Leicester.
The cost of living in a purpose built student accommodation block is significantly higher than your traditional 4 to 6 bed house share. Some blocks charge £150 per week upwards, whereas traditional HMOs can be from £60 per week.
There are some 60,000 students in Nottingham which should have the freedom of choice, and not be limited to extortionate rents for premium student housing that many may not be able to afford.
Mr. Inman went on to make someSales additional page Content very good points about other cities such as Leicester. “The council has no choice to put them up in blocks because they have put these planning restrictions in. Blocks have a very, very tight financial model and even with competition they will struggle to reduce rents because of the overheads.
“Who knows what is going to happen the way the economy is going. In Leicester they are struggling with under-occupancy, where the council has just bought a block for £5.5m.”
It’s our recommendation that landlords looking at HMO student accommodation familiarise themselves with the Article 4 restrictions in the area and look for opportunities to add to the student rooms available. The value of student HMOs in terraced houses that benefit from certificate of lawfulness will also be highly desirable at the moment to investors, both buying and selling.
