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Guardian - Discussion On Student Accommodation

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Guardian Live discussion on student accommodation

Now - Mon 22nd April, at noon.

http://www.guardian.co.uk/housing-network/2013/apr/19/student-accommodation-live-discussion?commentpage=1

Aaand... we have a b@stard already:

LettingFocus

22 April 2013 10:05am

( This comment has been chosen by Guardian staff because it contributes to the debate )

Yes, this should be a very interesting discussion.

We come across many housing associations wishing to make inroads into aspects of private rented housing and we often ask them what internal skills their executives have to ensure success with these ventures.

The rather glib answer we get from some is that managing such tenancies is not so disimilar to the existing tenancies they manage. But such a response ignores so many other variables and differences and seems to us a little naive.

For example, a key issue in letting to students is the risk that the likes of a Unite will arrive in the locale and build one of their own students blocks - the resultant possible (over)supply having an immediate impact on attainable rents.

So my question would be - do the housing associations recognise a need to improve their internal skill level in regards to managing private rent - and if so, how do they propose to achieve this?

David Lawrenson

www.LettingFocus.com

PRS Expertise

A much better comment:

NUSWelfare

22 April 2013 12:21pm

Hi everyone, I’m Jo Goodman and I work on student welfare policy at the National Union of Students. In a general sense, NUS welcomes the presence of social housing providers who are able to bring their expertise to the student market, but it is important that student lets are not viewed as a means of subsidising the rest of the portfolio. Our recent research into student financial wellbeing (www.poundinyourpocket.org.uk) found that over half of students regularly worry about meeting basic living costs and in many cases this is leading them to consider dropping out.

As Dick mentions, in many areas the market has become oversaturated with expensive provision kitted out with all mod-cons without any consideration as to whether this is what students want or can afford. This ‘drive to quality’ has meant that weekly rents have doubled in ten years and this is simply unsustainable – student loans have not risen anything like this much in this period and many students are struggling or choosing to stay at home.

We’d strongly recommend any provider considering entering into the market does some serious research first and considers what they’ve got to offer students.

Edited by Tired of Waiting

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Yep. Same old theme. Inflation in most things bad. In house prices and rents, good. And most of all, god forbid the market works and gives us lower prices.

If i was a Progressive type, who believes anything and everything should be banned, Id suggest folk like 'lettingfocus' be prosecuted for advocating cartel behaviour.

But im not, so i'll just stop at saying they're greedy, selfish, slumlorders :rolleyes:

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Have linked to this before but this is probably one of the best articles on the student housing market as it identifies the rent-seeking culture that educational institutions have adopted lately.

Housing Speculation, Student Debt, Fees and Dispossession - a 21st Century Love Story - Communique concerning UCL Stratford

There are several questions we have all been asking over these last few years. Where will we live? How will we be able to afford such expensive rent in London? How will we find jobs that pay enough to enjoy ourselves and live in comfort? When will we pay back our student debt? How?

We must be clear from the beginning, all the questions articulated above maintain a certain tie to one another. They are not unrelated problems, haphazardly assembled by the hands of mundane serendipity, the chaotic and capricious whim of fortuna, the inevitability of everyday life. No, we insist that they are all preciously constructed, maintained and reproduced in order to cultivate a certain set of social relations and a particular way of doing things. What ties them all together is debt, your debt, and the surplus that it creates being appropriated by Swiss private equity firms, Gulf state sovereign wealth funds, US and Japanese pension funds.

The Financial Times writes with earnest regularity on how the London student residential market represents a major source of income in these hard times for our mendicant investors, now on average making ten times the returns when compared to residential property from elsewhere in the UK. The student housing sector has ballooned from a fringe investment 10 years ago to a global market worth $200bn today with it becoming a ‘must have investment for most large funds’.

At the same time that we observe huge speculation on student accommodation and the ferocious entrance of private equity into the sector, we also see universities, now both sides of the Atlantic, issuing bonds secured against future earnings from tuition fees. The primary example here is the University of California which is presently in $13 billion debt as a consequence of various bond issues over the years and now, much as is the case with the sovereign debt of Greece and Spain, has to issue new bonds to ‘roll over’ the repayment of old ones. For institutions such as UCSC within the University of California the fact that there is no cap on fees, combined with the perpetual demand for college degrees (this is after all the only way one may enter the labour market for the overwhelming majority of ‘well paid’ jobs) means that despite their status as heavily leveraged institutions which for potential investors would not seem like a particularly good bet - they remain investment grade.

Subsequently the capacity of UCSC to raise tuition fees to whatever level it likes is advertised in every bond prospectus. Despite its high levels of debt UCSC is still seen as investment worthy precisely because it can charge what it likes, and as is meant to be the case, there are more applicants than places. This is not regarded as academic competition by university management however, rather it is seen as a situation of over-demand and insufficient supply, and hence the signal to further increase tuition fees until equilibrium and the ‘just’ price is found. Market equilibrium magistra vitae est.

We feel it important that students are in full receipt of these facts and are confronted with the inevitable outcome that the present cap of £9000 on tuition fees will not remain with us for long. Already we expect that the Russell Group of universities is lobbying to have it removed. Elsewhere those institutions such as De Montfort who, like UCSC, have begun to issue their own bonds will also need the cap to be abolished in order to guarantee the lowest costs for the debt-financing of future projects - a necessity in light of government funding being all but scrapped.

The present cap will soon go, and institutions as disparate as Cambridge and De Montfort are now issuing their own bonds. The university increasingly resembles little more than a debt factory. This is not glib comment, a casual and speculative refrain, but merely a statement of observable fact. Our future looks like Santa Cruz, only without the beach.

University College London have recently embarked on a £1 billion project - the extension of their London campus into Stratford. The fact that an institution which is failing to balance budgets in the short-to-medium term amid the most volatile period for higher education funding in decades is choosing to embark on such a large and unprecedented expansion is remarkable. Remarkable, but also of its time, in so much as it brings together many elements of the present moment and various catalysts for future crisis and present suffering. The dispossession of the land of those 300 people who still live there and the debt-financed investment in real estate and speculation on student housing, primarily for wealthier non-EU students. Social housing replaced by student housing funds run by private wealth managers, education no longer about capabilities and learning but merely a means by which to create returns from a relationship of debt.

UCL Stratford thus brings together many of the problems that you yourself face - impossible rent, debt, high fees. As a fee-paying student you are a cash cow - not just when you study, but even when you live in student accommodation. The institution does not serve your needs, rather you serve its need to service its debt and finance an ever larger number of managers who wish to ‘invest’ in land speculation and high-end residential buildings and perhaps even a few research centres. You may think of yourself as a part of the student body, but for the ‘bond guys’ and the more intelligent ones in university management you are simply thought of as what creates ‘returns’.

Universities are increasingly disposed to entering into what can only be described as PFI agreements with private equity and these ‘student housing funds’ to fund the construction of housing that students can live in throughout their university ‘experience’. We see this in the recent £1billion development in Cambridge that will see 3,000 new residential units for students - paid for in part by a £350 million 40 year bond - in partnership with private capital.

As UK universities increasingly employ financial instruments like those seen in California such as long-term bonds (which should really be called securities) students will be seen as no more than producers of the means of repayment, their debt the axis that produces the wheel turning for private investors seeking safe and strong returns and keeping the university afloat as public funding contracts to the point of an almost infinitesimal gesture that borders upon nothingness. This is your future as a debt, a debtor, the guarantor of returns for private equity and pension funds. You will be the assurance against loans that will pay for building facilities and housing that will mean more students who can pay more fees and more rent in order to secure yet more facilities and housing. And so on. All the time fees increasing in order to find equilibrium, rent increasing as there is quite literally nowhere else for you to live and the sons and daughters of the wealthiest families from across the globe are willing to pay.

UCL Stratford represents an active act of dispossession, taking people by force from their homes if necessary. It is pure, unadulterated violence. It has a direct relationship to your debt and the fact that rent in London is increasingly untenable for all but the very wealthiest individuals. Like the university, student housing is a debt factory. UCL Stratford, much like this whole miserable future on offer, can not be allowed to happen. If it does, if these projects and this system continue unimpeded, our lives will be miserable, brutish and shit - make no mistake about it.

http://partitaimaginaria.tumblr.com/post/36805668285/the-imaginary-party-housing-speculation-student-debt

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Yep. Same old theme. Inflation in most things bad. In house prices and rents, good. And most of all, god forbid the market works and gives us lower prices.

If i was a Progressive type, who believes anything and everything should be banned, Id suggest folk like 'lettingfocus' be prosecuted for advocating cartel behaviour.

But im not, so i'll just stop at saying they're greedy, selfish, slumlorders :rolleyes:

I disagree completely - with your conclusion. I think you were absolutely spot on on the "prosecuted for advocating cartel behaviour".

Total b@stards!

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in many areas the market has become oversaturated with expensive provision kitted out with all mod-cons without any consideration as to whether this is what students want or can afford.

It might be expensive now, but I wonder what oversupply will do to rents over time?

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Have linked to this before but this is probably one of the best articles on the student housing market as it identifies the rent-seeking culture that educational institutions have adopted lately.

http://partitaimaginaria.tumblr.com/post/36805668285/the-imaginary-party-housing-speculation-student-debt

sounds exactly like the military industrial complex. So many vested interests to perpetuate.

Robert Welch: "the only reason we are at war is to be a war"

Executive Sadman "the only reason we have a educational debt-ponzi is to have an educational debt-ponzi"

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It might be expensive now, but I wonder what oversupply will do to rents over time?

If the reds get back in we'll see more demand side propping with increased student loans under the guise of "helping hard pressed students".

Hell I wouldn't discount the torries doing it.

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Students obviously need somewhere to stay.

Most universities across Europe face the same problem, with mainly sh1tty private landlords taking up the excess.

I've seen NUS accommodations, and heck, they are much better than I had all those years ago. Small, but full of everything you'd require.

Even young lads in the armed forces don't get similar quality digs.

Of course, if you want a poky private place, that is your choice too.

Education is a profit seeking industry. Having the NUS take up the mantle and be the sole supplier to students for shelter can't be a bad thing in the long run, especially as the majority of private student letters have been less than stellar performers.

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The UCL Stratford plan collapses, looks like locals have averted this attempt by the council to gentrify the area for now at least.

A plan to build a university campus near the Olympic Park, in east London, has fallen through.

Newham Council and University College London (UCL) have been in talks to develop a site at the Carpenters Estate, in Stratford, since October.

Both parties said they were still keen for UCL to build a campus somewhere in Stratford.

Carpenters Against Regeneration Plans (Carp) said it was a "victory" but residents still faced "uncertainty".

Residents' 'relief'

The campaign group's chairman Osita Madu said: "I see it as a victory. The council wanted UCL to come to the area and displace residents - some have been living here for more than 50 years.

The council remains supportive of UCL establishing a major presence in Stratford”

Newham Council spokesman

"It is a relief but we are now faced with uncertainty over what the alternatives will be.

"There is an intention to get a developer to come in and railroad residents out."

UCL president Professor Malcolm Grant said: "Regrettably, UCL and [Newham Council] have not been able to bring their discussions to a successful conclusion in relation to the Carpenters Estate.

"This was an ambitious but extremely complex proposal and the process of intensive and lengthy examination has led us both to conclude that we cannot reach a commercial agreement.

"However, the process has re-affirmed the commitment of both parties to establishing a UCL presence in Stratford."

A Newham Council spokesman said: "UCL is one of the world's leading universities. We are disappointed that we were unable to bring UCL to the Carpenters Estate.

"The council remains supportive of UCL establishing a major presence in Stratford."

http://www.bbc.co.uk/news/uk-england-london-22446437

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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