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EUSA Student Housing Report 2015-2016 Executive Summary Section 1 of this paper gives a factual market context for the rented sector in Edinburgh, sets out the average pricing of housing available to students and highlights the unaffordability of student accommodation in the context of student budgets. Section 2 presents highlights of the data gathered in EUSA’s student housing survey, which confirms cost is a key factor in student experiences of searching for housing. Section 3 puts forward a number of recommendations to the university’s accommodation strategy and approach to student housing, including

Setting an internal definition and delivery target for affordable housing

Moving away from providing accommodation through Nominations Agreements with private developers, and maintaining affordable housing targets within them

Lobbying for more public sector regulation of private purpose build student accommodation

Supporting the development of student co-operatives

Introduction Students and the Housing Crisis The United Kingdom is in the midst of a housing crisis. Edinburgh is not insulated from its ill effects—indeed, Edinburgh is suffering in the heat of it. Inflation on rental prices in Edinburgh has been over 16.28% in three years (see below). 22 people are competing for a typical room up for rent in Edinburgh (Edinburgh Evening News 2015). Students in Edinburgh face a highly pressurised rented sector, and their need for shorter tenancies, propensity to move often, and lack of experience in the housing market make them particularly vulnerable. Housing prices are at record highs. A for-profit student accommodation industry has emerged, seeking to capitalise on the record numbers of students entering further and higher education. In recent years, Universities across the country have been raising rents in their own halls of residence above inflation, in efforts to generate new profits1. Poor protections for tenants and disincentives for private landlords and letting agencies perpetuate the substandard quality of the private rented housing stock. Additionally, there simply isn’t enough housing stock available to house all those looking for a home. In the 2014–2015 academic year, students came to the EUSA Advice Place2 to enquire about accommodation almost 3,700 times. Housing enquiries accounted for almost a quarter of all questions received, the number of questions having gone up more than 20% on the year before. Students in Edinburgh are worried about their housing. The University’s Plans The University of Edinburgh aspires to increase its enrolment, accepting an additional 200–300 students every year for each of the next 5–10 years. The majority of these additional entrants will be overseas students, who pay premium fees and as a result are often heavily in debt; they are

1 See, for example, the stance taken by the administration of UCL in response to a student rent strike: http://www.independent.co.uk/news/education/education-news/ucl-rent-strike-university-official-tells-students-it-is-a-fact-of-life-some-people-cant-afford-to-a6909736.html 2 The EUSA Advice Place is a non-biased, confidential advice service offered to all students, free of charge.

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particularly vulnerable when searching for housing as they have no experience or knowledge of the housing market in the UK. Whilst EUSA supports the University’s efforts to widen access to education, EUSA also believes housing costs and provision are a crucial factor in widening access. The university guarantees an offer of accommodation for all new full-time undergraduate students from outside of Edinburgh. As student numbers grow and pressure on the private rented sector increases, university-managed accommodation may also be increasingly necessary for students from later years. Developing a comprehensive University Accommodation Strategy is a necessary step towards meeting the needs of the University’s growing student body. However, if the university truly seeks to widen access to education and not just meet the needs of wealthy students, then the University must centre its strategy on affordability. What follows is EUSA’s contribution to the University’s accommodation strategy. The first section sets out our findings through desk-based research into the context of the housing market in Edinburgh, with a particular focus on the costs of the various types of housing available to students. The second section highlights results of EUSA’s Student Housing survey. The third section contains a discussion of EUSA’s recommendations for the University accommodation strategy.

Section 1: Student Housing Market Research

1.1 Increase of rental rates in Edinburgh in comparison to elsewhere in Scotland and the UK

Rents in Edinburgh have been rising faster than inflation, faster than wages, and faster than rents in

the rest of Scotland. Between 2014 and 2015, rents in the city rose by 5.6%, outpacing rental

increases across the country by 3.7 points (Citylets 2016b). See the table below for a comparison of

rent rates inflation between Edinburgh and other cities in Scotland.

Table 1. Rental rate inflation in Scotland in the last year

(Q4 2015 compared to Q4 2014; Citylets 2016b) ; data rounded to tenth of a percent

Aberdeen Dundee Glasgow Edinburgh Scotland

1 bed -14.5% 3.7% 5.2% 6.3% 3.7%

2 bed -14.7% 1.7% 3.2% 4.2% 1.6%

3 bed -15.2% -1.1% 5.6% 6.7% 0.9%

Over the last three years, rents in Edinburgh have risen more than 16%, more than in any other

Scottish city, and almost 6 percentage points more than the national average.

See the table below for a comparison of rent rates inflation between Edinburgh and other cities in

Scotland over three years.

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Table 2. Rental rate inflation in Scotland in the last three years

(Citylets (2016b) DataHub, comparing Q4 2015 to Q1 2013) ; data rounded to tenth of a percent

Aberdeen Dundee Glasgow Edinburgh Scotland

1 bed 2.2% 9.1% 14.4% 17.0% 14.72%

2 bed -1.2% 0% 15.9% 18.9% 13.12%

3 bed -4.1% -7.0% 16.4% 12.6% 3.9%

All -2.8% -0.35% 14.4% 16.3% 10.5%

“Tenant demand continues to outstrip available property with time to let at

record breaking levels and rent levels still very positive across the board. ”

p.4, Citylets Quarterly Report Q4 (2015)

For the UK context, the table below demonstrates the rent rate inflation over the last year by region:

Table 3. UK Rental rate inflation in the last year

(December 2015 compared to December 2014; HomeLet 2015)

Region Inflation

Greater London 8%

South East 7%

East Midlands 6.4%

East Anglia 5.7%

South West 5.5%

Scotland 3.2%

Yorkshire &

Humberside 3.1%

Wales 2.3%

North East 1.9%

West Midlands 1.7%

Northern Ireland -0.6%

North West -5.1%

2.1 Compilation of the average current monthly rental rate 1.2.1 University-provided student accommodation

All data for accommodation offered to students by the university was taken from the University

of Edinburgh Accommodation website (UoE 2016a). Rental fees for undergraduate residences are

presented on the website for the period of nine months for undergraduates, and 12 months for

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postgraduates, therefore the total amount was divided by 9 or 12, respectively, to get a monthly

fee. Both sets of rental fees are for self-catered accommodation only and they include all bills.

The average rent below reflects the average cost of a university-managed room, taking into

account the number of rooms available at each price level. The total number of rooms in each

residence block were taken from the Accommodation website, and where possible, numbers of

small versus large rooms were also included from data provided to EUSA by Accommodation

Services. When numbers of different room sizes were unavailable, the price of the standard room

was used for the full number of bedrooms in the residence. The yearly rent for a room was

multiplied by the number of rooms available, then divided by the total number of rooms, and

divided by 9 or 12 months again to arrive at an average monthly fee.

1.2.2 Private student accommodation

All data was taken from the following private student accommodation websites: Unite, iQ

Student Accommodation, Collegiate, CRM Students, Mansion Students, The Student Housing

Company, Fresh Student Living, Ziggurat Student Living. Rental fees are weekly, therefore they

were multiplied by 4.35 to get an estimate of a monthly fee. All fees are for self-catered

accommodation and they include all bills. Each accommodation site offered various room types

under different names across the companies; however, as we had no access to the proportion of

rooms available at each standard, only the rooms that appeared to be the standard type were

used when calculating the average fee, unless a higher standard was the basic offer. See

appendices for further information.

1.2.3 Private let eligible for students

All data was taken from results of running a search of accommodation eligible for students on

Citylets website in January 2016. Citylets advertises more than 80,000 properties per year. They

host a comprehensive directory of more than 400 letting agents. At the time of the research

(February 2016), 351 properties were eligible for students to rent directly via private landlords or

letting agencies. To make the research consistent, the monthly rents were divided by a number of

bedrooms in each property, and then an average monthly rent per bedroom was calculated. The

rent fees do not include the bills. See appendices for further information.

1.3 Comparison of the rates of the above types of student accommodation Table 4.

Type of accommodation Average monthly rent

(per bedroom)

Order by price (low

to high)

University student accommodation (UG) £506.22* 6

University student accommodation (PG) £515.22* 7

Private student halls £673.95* 9

Private let eligible for students (average) £447.65 4

Private let eligible for students (1 bedroom flat) £601.90 8

Private let eligible for students (2 bedroom flat) £455.54 5

Private let eligible for students (3+ bedroom flat) £428.93 2

Private let eligible for students (average; excl. 1 bedroom flat) £432.46 3

Co-operative student housing (3, 4, and 5 bedroom flats) £305.00* 1

*including bills

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1.3 University student accommodation in the context of ‘affordable housing’ and student

budgets

1.3.1 Affordable Housing

Two definitions of the ‘affordable housing’ were identified:

Affordable housing is defined broadly as housing of a reasonable quality that is

affordable to people on modest incomes. Affordable housing may be provided in

the form of social rented accommodation, mid-market rented accommodation,

shared ownership housing, shared equity housing, housing sold at a discount

(including plots for self-build), and low cost housing without subsidy.

p.31, Scottish Planning Policy (Scottish Government 2014)

Affordable housing is defined in the Council’s planning guidance as “housing that

is available for sale or rent to meet locally the identified needs of people who

cannot afford to buy or rent housing generally available on the open market.” It

should meet this definition in perpetuity.

p.2, Affordable Housing (The City of Edinburgh Council 2007)

Whilst these definitions are quite broad, several guidelines drawn into these definitions in Edinburgh

can be identified.

According to data made available by the Scottish Government (Scottish Government 2013), the

overall average level of rent for social housing in the City of Edinburgh for 2012-2013 (the most

recent year available) is about £77/week, or £333/month per property. Properties range from an

average £248/month for a 1-person apartment, to an average £418 for a 5+ person apartment.

Local housing allowance (LHA) is the way that housing benefit is calculated and paid to tenants of

private landlords. This benefit goes directly to private landlords to contribute towards housing cost,

and this can include mid-market rented accommodation as well as social housing. The current rate

for the Lothians region, which includes the City of Edinburgh, is £68.27 or £296.97/month for 1

bedroom in a shared property. Housing benefit is often insufficient to cover even the cost of social

housing in the city, which is a testament to the rate at which housing costs have increased.

None of the average rental rates available to students approach a level of affordable housing as

above. When surveying the lowest available accommodation in each category (Appendix 1), the least

expensive university self-catered standard room is £424. There are six accommodation blocks which

offer twin rooms (shared between two people) at £258 or £350. There are a further four

undergraduate and one postgraduate accommodation block which offers “small” single rooms at

just under £400. Data on room numbers seen by EUSA shows there are only 50-60 small rooms

available at under £400, out of a total number of almost 6,000 university-managed rooms.

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1.3.2 SAAS bursaries

This report assumes throughout when developing pricing scenarios that students will opt to take

out the full amount of government-sponsored student finance support. Increasingly, this support

comes in the form of loans. The current Scottish Government has cut the budget for the young

students’ bursary by 35%, from £65.4m in 05-06 to £39.9m in 2014-15. In the year 13-14, when

the greatest changes to eligibility were made, Scottish Government spending on student loans

increased by 68.9%, with the size of the average loan increasing by 61.4%, and 4.9% more

students taking out loans (Times Higher 2014).

It is beyond the scope of this report to discuss university approaches to student debt, however it

is worth noting that even all current assumptions of ‘affordability’ of student living are based

fundamentally upon the notion that students will graduate with at least £20,000 of debt.

It is also worth noting that ‘household’ income refers to the household of the students’ parents,

even though students are adults and many are expected to self-fund their education. This

mechanism has a built-in bias towards students with parents who are able and willing to further

support them financially through their studies, a luxury which many students do not have.

Standard loan and bursary rates awarded by the Student Awards Agency for Scotland (SAAS) are

shown below.

Table 5. Standard SAAS bursary and loan rates 2015-2016 (SAAS 2016)

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The table below shows what proportion of this budget would be taken up by the different types

of student housing analysed, for a student in the £24,000-£33,999 category, who would be

receiving total yearly SAAS support of £6,250, averaging out to £695/month for a 9-month term.

Table 6. Comparison of student housing prices with budget for SAAS recipients in £24,000-£33,999

bracket

Type of accommodation Average monthly rent

(per bedroom)

Percent of budget

used for housing

Amount left over for living

expenses/month

University student accommodation (UG) £506* 72% £189

University student accommodation (PG) £515* 74% £180

Private student halls £674 97% £21

Private let eligible for students (average) £448 65% £247

Private let eligible for students (1 bedroom flat)

£602 86% £93

Private let eligible for students (2 bedroom flat)

£456 64% £239

Private let eligible for students (3+ bedroom flat)

£429 62% £266

Private let eligible for students (average; excl. 1 bedroom flat)

£432 63% £263

Co-operative student housing (3, 4, and 5 bedroom flats)

£305* 44% £390

*including bills

The table below shows what proportion of this budget would be taken up by the different types of

student housing analysed, for a student in the £34,000 and above category, who would be receiving

total yearly SAAS support of £4,750, averaging out to £528/month for a 9-month term.

Table 7. Comparison of student housing prices with budget for SAAS recipients in £34,000+ bracket

Type of accommodation Average monthly rent

(per bedroom)

Percent of budget

used for housing

Amount left over for living

expenses/month

University student accommodation (UG) £506* 96% £22

University student accommodation (PG) £515* 98% £13

Private student halls £674* 100% £0

Private let eligible for students (average) £448 85% £80

Private let eligible for students (1 bedroom flat)

£602 100% £0

Private let eligible for students (2 bedroom flat)

£456 86% £72

Private let eligible for students (3+ bedroom flat)

£429 81% £99

Private let eligible for students (average; excl. 1 bedroom flat)

£432 82% £96

Co-operative student housing (3, 4, and 5 bedroom flats)

£305* 58% £223

*including bills

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1.3.3 Scenario 1 – Undergraduate who works

An undergraduate student working 15 hours a week earning a wage of £6.70/hour3 would earn

about £400 each month. That same student taking the full SAAS loan would have an additional

£530 each month from the loan4, providing the student a total of about £930 each month to

cover all expenses. Based on average monthly rent for University halls open to undergraduates,

this student might expect to pay 54% of their budget on housing alone. Based on the University

of Edinburgh’s own lower range estimates for further living costs—£140 for food, £10 for mobile

phone, £10 for laundry/toiletries, £25 for printing, stationary, photocopying and textbooks—this

student would have £239 for other expenses, or to save up for summer months when SAAS

support is unavailable (26% of the total monthly budget).

1.3.4 Scenario 2 – Postgraduate who works

A postgraduate student receives a maximum living cost loan from SAAS of £4,500 (split over the

full 12 months of a postgraduate degree) and works alongside the undergrad in Scenario 1,

earning an additional £400 per month. This PG student would have a total monthly budget of

£777. Living in University postgraduate halls, this student might expect to pay 66% of their

budget on housing alone. After accounting for further living costs as in Scenario 1 above, this

student would have just £77 for other expenses (10% of the total monthly budget).

1.3.5 Additional remarks

It should be noted that in the University’s estimates of monthly costs of living at a lower range

(UoE 2016b), the total cost of rent, bills and the internet access comes to a total of £420.

However there is a small number of University’s student accommodation properties offering

accommodation priced at this level (see appendix: TAB 2).

During the research process, the monthly cost of food at a lower range seemed very low at £140.

However, to keep the research consistent, this amount was used in the two scenarios, as these

calculations are used both by the University of Edinburgh and the Advice Place at EUSA.

1.4 Summary

It is clear that the housing market in Edinburgh is highly competitive, with inflation far exceeding any

other Scottish city, as well as yearly cost of living salary increases or minimum wage increases5.

University accommodation is more affordable than living in a one-bedroom flat, but remains more

expensive than the average price of any shared private let.

The average cost of living, not including housing and bills, is estimated to be £185 in the lower range

by the University’s own estimate (UoE 2016b). If a student opts to receive the full amount of SAAS

bursary and loan available to them, the university’s accommodation offer does allows students to

retain just barely enough money for basic living costs after the cost of accommodation. In the case

of students receiving only loan support, none of the accommodation offers identified, outside of co-

3 This is the national minimum wage for 21–24 year olds and the rate EUSA pays to all part-time student employees under 25 years old. Many younger students who work elsewhere will receive the minimum wage for 18–20 year olds of £5.30/hr. Those students who are 17 years old could receive as little as £3.87 for each hour of their work, amounting to just £230/month part time. 4 This assumes dividing the total loan equally across the 9 months of the academic year. 5 EUSA offers salaried staff a 1% yearly uplift in salary to cover cost of living. The national minimum wage increases at 3% a year.

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operatives, allow for anything close to £185/month in living costs (which would further increase to

an estimated £255 when accommodation does not include bills).

In Scenarios 1 and 2, assuming a student works 15 hrs/week, the cost of university accommodation

in the context of monthly budgets becomes appears more reasonable, but still does not allow

savings approaching cost of living for the summer months, when SAAS support is unavailable. The

expectation on students to work throughout their time in university also has a proven negative

impact on the student experience6.

It is also clear that housing costs of private student halls are completely outside the range of

standard SAAS support, and significantly more expensive than any other housing offered in the city,

at 56% more expensive than the cost of an average private let (excluding 1 bedroom flats), and 33%

more expensive than university-managed undergraduate accommodation.

6 Results of the New Student Survey 2015 asked students who stated they were not involved in any extracurricular activities why this was the case. Over a quarter of students with the “PLUS” admissions flag (from 35% lowest attaining schools in Scotland) responded that this was because they didn’t have time due to paid work. Research conducted by EUSA in partnership with Student Recruitment and Admissions shows UK students with three Widening Participation markers were approximately only half as likely to hold society and volunteering group positions.

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Section 2: Student Survey Data

1. Background and context

EUSA ran a survey on student experiences of housing. The survey was approved for distribution to all students,

and was emailed out through EUSA’s weekly all-student email. The survey was open between 14 and 31 March

inclusive, and 257 students completed some or all of it. Full results of the survey are available in Appendix 2. The

most relevant highlights of the data are laid out below.

2.1 Budgeted vs actual expenditure on housing Students were asked to compare how much they had budgeted to pay before they found their accommodation (Question 1) and how much they actually pay (Question 10):

Figure 1. Question 1 vs Question 10

While 56% of respondents had budgeted to pay below £400/month, only 24% actually ended up

paying below £400, with a significant increase in those paying over £450.

3.5% 6.2%

14.0%

32.7%29.2%

8.2%4.3% 1.9%2.6% 0.0% 6.9%

14.7%18.1%

24.2%

12.6% 10.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

How much had you budgeted/hoped to pay per month for your accommodation, including utilities?

How much do you actually pay?

Budget Actual

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When asked if they had to compromise on any of their criteria during their accommodation search, ‘cost’ was by

far the most common answer, with 53% of respondents stating they had to compromise on their desired cost.

‘Perceived value for money’ and ‘quality of accommodation’ were also selected by 42% and 44% of respondents,

respectively, possibly reflecting that if cost is not compromised on, the standard of accommodation is likely to

drop.

Figure 1. Question 3

Figure 2. Question 3

29

112

5561

17

90

16

93

0

20

40

60

80

100

120

Question 3: Did you have to compromise on any of your accommodation criteria during your search? (Select all that apply)

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2.2 Private student halls Figure 1. Question 10

Figure 3. Question 4

75% (176 out of 234) of those surveyed did not consider private student halls, with more

than half citing a version of “too expensive” or “overpriced” as the reason.

Of those who did consider private student halls but did not secure them, 70% (25 out of 36)

of respondents gave a version of “too expensive” or “overpriced” as their reason.

2.3 Case studies Many students left further comments about their experience searching for accommodation or current accommodation. Of 69 free text comments, only eight were positive or neutral. 61 comments were explicitly negative about the quality, cost, location of the accommodation, and/or the process of searching for it. Many stated their experience in Edinburgh was much more negative compared to experience renting in other parts of UK and the world. A few excerpted comments are below, and full free text comments are available on p.25 of Appendix 2. “It is so incredibly difficult to find anything, that you can’t really have any standards quality wise if you only have a certain budget”

24.70%

75.20%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Yes No

Question 4: Did you consider private student halls (eg. Unite, iQ, Student

Housing Company)

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“We really struggled in our search for accommodation – competition is so high that the private sector is brutal, and I found this difficult” “Prices seem to increase and private companies have started changing the length of the tenancy, so that they make even more profit” “I wouldn’t mind at all to have a smaller room at the cost of cheaper rent” “It is so hard to find accommodation that isn’t terrible, far away and extortionate. Flat hunting in Edinburgh is so incredibly stressful compared to other student cities like Dundee etc. The price of living is incredibly high in Edinburgh and any properties of a decent standard or in an ok location are extremely overpriced. Even the rubbish flat which I live in now is £400/month, without a living room and a single bed” “Not an ideal situation when you have to pay more than you can afford because of the pressure to lock something down due to how ridiculously competitive and expensive Edinburgh is for students” “It was hell. I was first staying in halls. It was okay but really far from the main uni buildings, bad value for money […] I moved out because I applied to transfer twice but was only offered the really expensive halls and I was hoping to get a work based placement. […] I couldn’t find anywhere to live for 3 months and have only just now got accommodation. I was showering at uni and sleeping on sofas. I fell behind on my studies and considered dropping out.”

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Section 3 – Discussion and recommendations 3.1 Affordability of university accommodation The University cannot reasonably claim that its degree programmes are accessible to all when basic needs such as housing are outwith so many students’ budgets, even when assuming they will take out all available loans. If affordable housing for students is not available on the private market, then the University must take other measures to ensure that students can afford a decent place to live. Given the rapidly rising costs of accommodation in Edinburgh, and student dissatisfaction with their housing experience, with an emphasis on cost and value for money, the University has a responsibility to ensure it can continue to accept students from a range of income backgrounds and levels of support from family. The cost of housing is a key variable students will consider when deciding whether they can afford to attend university, and will in the first instance consider the costs of university-managed first year accommodation. EUSA recommends the University set an explicit internal definition of ‘affordable accommodation’, and set targets for percentages of affordable accommodation offer which the university will offer to students. EUSA believes all student accommodation should be affordable in the context of student budgets. However, for the purposes of this recommendation, we use the term ‘affordable’ in the context in which it is described in Section 3.1, that is, low-cost housing which is accessible to those with modest household incomes or who would not be able to afford accommodation available on the open market. One proposed mechanism to determine these targets could be for the university to hold themselves to the same standards as private developers in delivering a 25% affordable housing requirement. The pricing level included within this requirement could be in line with city-wide social housing rates, or determined as a percentage of the household income of low-income students. Given that social housing in the city is rented at an average of £333, and this is often for properties for more than one person, the university should aim for an affordable housing definition close to this average, and certainly no greater than £400. Another mechanism could be to set an affordable housing target equivalent to the proportion of students with a household income below a certain level, and pricing levels of this housing in turn not to exceed a certain proportion of this income. At the very least the target should be equivalent to the percentages of students with household incomes at levels which would make students eligible for a government bursary. It is crucial that international students’ household incomes should be included in this assessment. Given the university’s choice to accept progressively larger intakes of students, which will put greater pressure on the Edinburgh private housing market and drive up private housing prices, EUSA believes the university has a responsibility to continue increasing the percentage of affordable accommodation it provides. The initially established threshold should be re-evaluated at relevant points in the university’s financial cycle, and at the latest a full review should be carried out at the end of the first five year commitment period. 3.2 Private purpose build student accommodation One trend emerging clearly from the above research is the exorbitant cost of private purpose built

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student accommodation (PBSA) rooms compared to other student accommodation, and the concomitant student reluctance to consider PBSH as a housing option due to its cost. In recent years, the University has begun signing long-term lease agreements with private student housing developers. The University currently offers a number of accommodation sites to students through its Accommodation Service, which are actually owned by private developers. EUSA is aware of this type of accommodation offer at Abbeyhill, Richmond Place, Ratcliffe Terrace, Ascham Court, Shrubhill and Murano. A 15-year lease for a new 550-bed student accommodation block at the former Homebase site, which would be managed by the developer Unite, is in the process of being finalised. These properties are planned and built by private developers like Unite (as at new Homebase site), Ziggurat (as at Murano and Shrubhill) or the Student Housing Company (as at Abeyhill). The university undertakes primarily long-term Nominations Agreements with these developers, under which the obligations of the university are to pay rent at a mutually agreed price and fill the rooms. All facilities management is undertaken by the developer. The majority of these agreements last for 15 years. The university pays rent to these developers at what it claims to be a mutually agreed rate, which keeps the accommodation within affordable levels for students. Some rooms in developments such as Shrubhill or Murano are still available for direct private let and advertised at between £600-800/month, whilst the university lets them to students in the £500/month range, so this claim appears to hold somewhat. However, all of these accommodation blocks are firmly at the high end of university-offered accommodation and completely outside of SAAS-supported student budgets. The most affordable are rooms in Ratcliffe Terrace at £485/month, and the most expensive at Ascham Court at £627/month. Additionally, there is very little flexibility to lower these costs, as developers build predominantly luxury studio and ensuite rooms, giving them increased leverage to charge the university premium rates. Purpose build student accommodation is exempt from all currently existing regulatory mechanisms in the private housing sector, which is of great concern to EUSA, given continued growth in student numbers, and the university’s growing propensity to sub-contract properties from private developers. Scottish Planning Policy stipulates that for each new housing development site, the developer should contribute 25% of the total number of housing units as affordable housing (City of Edinburgh Council 2016, Scottish Government 2010). This proportion of the development site can be developed by or for a Registered Social Landlord or local authority, and the developer would transfer the housing stock to them at less than the value of mainstream housing for sale. If a housing site is unsuitable for affordable housing, developers may provide the contribution on another site in their ownership, or provide a payment to the housing authority in equivalent value to the cost of providing the 25% affordable housing. Developer contributions are not required for purpose build student housing (City of Edinburgh Council 2016). City of Edinburgh planning guidance put in place in February 2016 requires new student housing developments on sites greater than 0.25ha to provide a 50/50 split between student accommodation and housing. The 25% affordable housing guidance will apply to the residential part of the development, but not the student accommodation (Planning Committee

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2016). PBSA is also fully exempt from new housing regulations in the new Private Housing Tenancies (Scotland) Bill, passed in March of this year, which followed a years-long campaign by various third sector organisations and students’ unions for greater regulation of the private rented sector. The Bill introduces the ability for local authorities to apply to be designated as ‘rent pressure zones’, which will in turn result in caps on rent increases in those areas, along with a swathe of other new protections for tenants in the Bill. Because of their exemption, the costs of PBSA will continue to soar, even if the local authority it is in is designated a rent pressure zone where rent increases will be capped. EUSA therefore recommends the university re-evaluate its direction of travel in providing student accommodation through nominations agreements through private developers. Given the excessive costs of PBSA and the likelihood they will continue to rise given the lack of regulation, agreements with private developers will result in student accommodation at the most expensive level within the university’s accommodation offer, even if market prices are under-written by the university. EUSA understands the immediate need for additional student accommodation has resulted in the currently existing agreements, some of which may result in a better deal for students than they may be otherwise forced into by the private market. However, now that a long-term accommodation strategy is being developed, the university should avoid leasing from private developers whenever possible, and favour routes which can result in a better mix of affordability for students, such as university-built developments or university-owned flats. If the university does sign further nominations agreements with private developers, it should ensure that the new properties do not result in any change to the overall proportion of affordable housing available to students through the university. If the university were to set a target for affordable accommodation, as recommended in Section 2.1, it could work more closely with private developers from an earlier stage in the building project and make clear a long-term agreement will not be signed unless affordable accommodation targets are met. This would also ensure private developers build a greater mix of luxury and standard or small rooms, allowing them to vary prices. The university should also lobby the Scottish Government and the City of Edinburgh council for greater regulation of PBSA. This could come in the form of an affordable housing requirement for PBSA similar to the one currently in place for new developments, from which PBSA is exempt. PBSA could either be included in the current affordable housing requirement, which would result in publicly available mixed affordable housing, or a new type of regulation specifically for affordable student housing. EUSA has already approached members of the City of Edinburgh Health, Social Care, and Housing Committee with this proposal.

3.3. Supporting student co-operatives

Housings co-operatives offer one of the best models for the provision of affordable, quality, and

enriching student accommodation. A housing co-operative is different from other models because

all the tenants are part owners of the co-operative, meaning all tenants have direct control over how

their home is managed. Self-management reduces costs, empowers residents, and encourages—

indeed, requires—residents to develop new skills such as property management, budgeting and

financial planning, maintenance and general repairs, as well as to learn about legal structures, group

decision making, and conflict resolution.

With 106 members, the Edinburgh Student Housing Co-operative (ESHC) is the largest such housing

co-op in the UK. ESHC Ltd is a registered society under the Co-operative and Community Benefit

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Societies Act 2014, and it is fully owned by its 106 members, who all have equal say in how it is

managed. The Co-op is currently in its second year of operation, having moved into its properties in

August 2014.

ESHC manages two blocks of flats, 28 and 34 Wright’s Houses, which it rents from Castle Rock

Edinvar. For the first two years of occupancy, rent to CRE has been £250,000pa. Hence, about

£200/resident/month is required to pay the rent for the buildings. Because the tenants manage the

buildings themselves—including managing IT infrastructure, carrying out basic repairs, and

maintaining their financial accounts—costs beyond rent to CRE are kept low. For the first two years

of operation, tenants have each paid £305/mo. This rent includes utilities, internet, laundry, and

basic flat supplies such as washing up liquid, toilet paper, and all-purpose cleaner. Funds are also

budgeted for entertainment events, communal food for general meetings, communal resources such

as a projector, gardening supplies, etc.

To date, ESHC has run an annual surplus of approximately £20,000–£30,000. The uses for this

money, as everything else, are decided by the tenants. At present, surplus is being reinvested into

the buildings to refurbish the basements from car parks into habitable, communal areas. The Co-op

has also investigated installing a solar PV system on its roof, and is in the planning permission phase

of that project. All decisions face extensive scrutiny by the membership, as each member has a

vested interest in the success of the Co-op.

Co-operative living is attractive to students for many reasons. It provides autonomy and self-

empowerment in an era where students (adults) are forced to rely on their parents, to live in

substandard housing or sterile halls, to accept decisions that others make for them. It provides

spaces to learn new skills, to make things, to change things—to learn by doing.

Student demand for co-operative living is high. In each of the previous three application periods,

there were between 4 and 10 applicants for every available room. Many students still haven’t heard

of the Co-op, and other students may not have applied if they knew the odds were low.

ESHC recently approached EUSA about expanding to another property, given their success over the

past two years and increased demand for rooms at the Co-op. EUSA and members of the University

were instrumental in the founding of ESHC, through a hugely successful EUSA referendum campaign,

as well as significant support from then-Rector Peter McColl and several EUSA sabbatical officers.

EUSA is affiliated to Students for Cooperation, a national network for the student co-operative

movement, and the union strongly supports ESHC’s expansion efforts. EUSA believes a student co-

operative model provides vast opportunities for more affordable student housing and better student

living.

At present, there are two principal challenges to expanding student housing co-operatives here in

Edinburgh: (1) finding suitable properties, and (2) financing the purchase and/or renovation of such

properties.

The University of Edinburgh could help students overcome both of these challenges.

Finding New Properties:

The University of Edinburgh owns suitable properties across Edinburgh that could immediately or

after some redevelopment serve as student co-operative housing. Properties could be rented or sold

(or given) to co-operatives, knowing that they would provide affordable housing for the Edinburgh

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student population for generations to come. Further, the University could, through its networks,

help students identify other suitable properties and help them negotiate their acquisition.

Financing Properties:

Co-ops often struggle to gain access to traditional sources of financing. High street banks are largely

unfamiliar with the co-operative corporate structure, and this engenders a reluctance to lend to

them. New co-operatives looking for a property often have nothing against which to leverage a

loan—so even if a loan could be secured, the interest rate will be untenably high. The University of

Edinburgh could—in various possible ways—act as a lender to help co-ops finance the purchase

and redevelopment/refurbishment (if necessary) of suitable properties. If the University is not in a

position to act as a lender in this right, Co-ops are entitled to offer “loan stock”, which allows them

to accept loans on simple terms from individuals or institutions. As an alternative to outright lending,

the University could purchase a property and rent it to a co-op, e.g. under terms that would

transfer the freehold to the co-op after a certain period of time or amount of payment. Any of these

arrangements could be designed as investments by the University, for which the University would

ultimately receive a return. They could also be designed as strategic gifts. If a co-operative owns a

sizeable property outright (i.e. if it does not have to pay rent or make mortgage payments), then it

can use the rental income beyond maintenance and upkeep to invest in new co-ops. In this light, the

University could make a lasting and self-propagating contribution to the student co-operative

movement and availability of affordable housing.

Having one large student housing co-operative in Edinburgh is a novelty. Having a network of

student co-operatives across the city that houses a significant portion of the student population

would be unprecedented in the UK. Such a network would be a major attraction for students

nationally and internationally, and distinguish Edinburgh University amongst Higher Education

institutions.

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Conclusion A significant challenge lies ahead in order for the University of Edinburgh to meet housing

requirements for its students given its ambitious scale of growth over the next 5-10 years. Each

yearly intake of students will need to be guaranteed first year housing. As the larger year groups of

students move through later years of university, greater numbers of returning students may also

need university-provided accommodation, as it is clear the private rented sector in Edinburgh is

already stretched to its limit.

It is crucial the university approaches this challenge with a view to providing a mix of student

accommodation at various price levels, specifically affordable student accommodation. To guide its

progress in this direction, the University should set its own definitions of affordable housing, and

set targets for provision of affordable housing over the medium and long term. One innovative and

mutually beneficial way to provide more affordable housing would be to support the Edinburgh

Student Housing Co-Operative in its expansion into a network of cooperatives. EUSA believes

affordable housing targets are unlikely to be met if the university continues to supply additional

housing through private developers, so the university should prioritise alternative opportunities for

student housing development, which will allow for greater flexibility in room types and pricing levels,

and lobby for greater regulation of purpose build student accommodation.

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References and useful links

CITY OF EDINBURGH COUNCIL, THE. 2007. Affordable Housing.

http://www.edinburgh.gov.uk/download/meetings/id/3347/affordable_housing

CITY OF EDINBURGH COUNCIL. 2016. Developer Contributions and Affordable Housing.

HTTP://WWW.EDINBURGH.GOV.UK/DOWNLOADS/FILE/6813/DEVELOPER_CONTRIBUTIONS_AND_AFFORDABLE_HOUSING_2

016

CITYLETS. 2015. Quarterly Report – Q4 2015. http://www.citylets.co.uk/research/reports/pdf/Citylets-

Quarterly-report-q4-15.pdf

CITYLETS. 2016a. Search for accommodation. http://www.citylets.co.uk/

CITYLETS. 2016b. DataHub. http://www.citylets.co.uk/research/datahub/

EDINBURGH EVENING NEWS. 2015. “22 people vying for every rented room in Capital”.

http://www.edinburghnews.scotsman.com/news/business/22-people-vying-for-every-rented-room-

in-capital-1-3892130

HOMELET. 2015. HomeLet

PLANNING COMMITTEE, City of Edinburgh Council. 2016. “Edinburgh Planning Guidance: Student Housing –

Finalised revised guidance for Approval”. http://www.edinburgh.gov.uk/download/meetings/id/49881/item_51_edinburgh_planning_guidance_studen

t_housing_%E2%80%93_finalised_guidance

SAVE THE STUDENT. 2014. Finance system for Scottish students. http://www.savethestudent.org/student-

finance/finance-system-for-scottish-students.html

SAVE THE STUDENT. 2015. Money survey. http://www.savethestudent.org/money/student-money-survey-

results.html

SCOTTISH AWARDS AGENCY SCOTLAND. 2016. Funding available.

http://www.saas.gov.uk/full_time/ug/young/funding_available.htm

SCOTTISH GOVERNMENT. 2010. Planning Advice Note: Affordable Housing and Housing Land Audits.

http://www.gov.scot/Resource/Doc/212607/0103970.pdf

SCOTTISH GOVERNMENT. 2013.Social Sector Housing Tables.

http://www.gov.scot/Topics/Statistics/Browse/Housing-Regeneration/HSfS/socialtables

SCOTTISH GOVERNMENT. 2014. Scottish Planning Policy. http://www.gov.scot/Resource/0045/00453827.pdf

SCOTTISH GOVERNMENT. 2015. Local Housing Figures. http://www.gov.scot/Topics/Built-

Environment/Housing/privaterent/tenants/Local-Housing-Allowance/figures/lha2015-2016

TIMES HIGHER EDUCATION. 2015. ‘Scottish government switches student support spending to loans’.

https://www.timeshighereducation.com/news/scottish-government-switches-student-support-spending-to-

loans/2016647.article

UNIVERSITY OF EDINBURGH. 2016a. Accommodation. http://www.accom.ed.ac.uk/

UNIVERSITY OF EDINBURGH. 2016b. Estimated living costs 2015/16.

http://www.ed.ac.uk/studying/international/finance/cost-of-living

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Appendices

Appendix 1. Data used in housing price research.

TAB 1 – The summary of University’s student accommodation rent levels

TAB 2 – The summary of private student halls rent levels

TAB 3 – The summary of private let eligible for students

TAB 4 – Full data of University’s student accommodation rent levels

TAB 5 – Full data of private student halls rent levels

TAB 6 – Full data of private let eligible for students (by the postcode)

TAB 7 – Full data of private let eligible for students (by the number of bedrooms)

Appendix 2. Student Housing Survey Data full results