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Student Housing Bubble Squeezes Tech Sector

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Startups are good and useful in a way that cheap, pump-and-dump student housing created to serve a short-lived education bubble isn't. They bring in a diverse set of people with diverse retail needs, supporting a wide variety of services that transient students have no use for. But more importantly, they're good for the country. They are an alternative to a brain-draining exodus to the San Francisco Bay area. They hold the potential for the creation of good jobs and local firms that pay local taxes and nurture local talent.

http://www.theguardian.com/cities/2014/mar/10/slow-death-of-silicon-roundabout

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I am seeing a huge amount of student housing going up in Kingston (SW London) at the moment. Any vacant spot that is not deemed suitable for 'luxury' apartments because it is too near a major road or council estate gets a student block on it.

I can understand why the developers love it, one of the blocks is rumoured to have a weekly rental of £150 for a tiny en-suite room which is much better than proper flats rent out for on a £ per sqft basis.

What I didn't understand is who is actually renting them at these ridiculous rates, but it makes sense if it is rich foreign students.

Kingston is a large university that does not rank very highly in a lot of subject areas, but is doing quite well in recruiting students because it's proximity to London make it easy for a large number of students to commute there whilst living at home meaning that university is still affordable despite the £9k tuition fee burden. I'd have thought this would drive less demand for students housing locally rather than more.

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Who needs wealth creating entrepreneurial activity when we can just sell the same piles of bricks to one another at ever increasing prices?

Isn't it strange that we're all so poor, i don't know what it could be.

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Loads going up here in Huddersfield too. Think the going rate is £90-£100 per week. Loads of 'To Let' signs in Rigbysville. Amazing how quick they can build when their is foreign student cash to hoover up (mainly Chinese).

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I am seeing a huge amount of student housing going up in Kingston (SW London) at the moment. Any vacant spot that is not deemed suitable for 'luxury' apartments because it is too near a major road or council estate gets a student block on it.

I can understand why the developers love it, one of the blocks is rumoured to have a weekly rental of £150 for a tiny en-suite room which is much better than proper flats rent out for on a £ per sqft basis.

What I didn't understand is who is actually renting them at these ridiculous rates, but it makes sense if it is rich foreign students.

Kingston is a large university that does not rank very highly in a lot of subject areas, but is doing quite well in recruiting students because it's proximity to London make it easy for a large number of students to commute there whilst living at home meaning that university is still affordable despite the £9k tuition fee burden. I'd have thought this would drive less demand for students housing locally rather than more.

Doesn'[t even have to be rich foreign students. Pretty much any foreign student is going to go for the in house option from the off. Moving to a new country on your own and starting a degree course in a second language is hassle enough for an 18 year old, without having to navigate the pains of the local student letting market.

Plus of course the university is going to funnel them in that direction. All they need to do is make it so the accomodation office no longer seeks out local landlords but points them all in the direction of these flats and they are sorted. So long as they are not stupidly greedy its money in the bank.

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Silicon Roundabout is a joke.

Anyone with a decent chance of successfully creating a start-up would, without a doubt, go to the Bay Area rather than waste their time in London. VCs are handing out money left and right in Silicon Valley. In London, they are not. The only people in London are a bunch of clueless wannabes.

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Silicon Roundabout is a joke.

Anyone with a decent chance of successfully creating a start-up would, without a doubt, go to the Bay Area rather than waste their time in London. VCs are handing out money left and right in Silicon Valley. In London, they are not. The only people in London are a bunch of clueless wannabes.

Not what I've recently heard. Some colleagues recently got sight of some code for some one man band start up that had somehow managed to get a serious wedge from some ignorant London based VC. Apparently it was something of a horrorshow.

Plenty of clueless wannabes, check. Plenty of even more clueless VCs to fund them though.

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Anyone with a decent chance of successfully creating a start-up would, without a doubt, go to the Bay Area rather than waste their time in London.

Both places are very expensive to live in which is why 'tech city' is a failure, which is what the article is pointing out. 'Investment' in bricks trumps actual investment in actual wealth creation, the reason we're all in this mess to begin with.

When you bootstrap you want a low cost of living, so you dont want to be in London or San Fan. If you want to burn through money by spending it on high rents you likely want VC money, but that isn't free.

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Both places are very expensive to live in which is why 'tech city' is a failure, which is what the article is pointing out. 'Investment' in bricks trumps actual investment in actual wealth creation, the reason we're all in this mess to begin with.

When you bootstrap you want a low cost of living, so you dont want to be in London or San Fan. If you want to burn through money by spending it on high rents you likely want VC money, but that isn't free.

VC money isn't free in that it costs equity. But such is the allure of the "story", that most tech start-up founders I know are in it for the dream, not the reality. They own none of "their" companies, but they can tell the story of being a tech start up founder based at silicon roundabout.

They can wear tight trousers, grow facial hair in the latest style and hang out in Shoreditch drinking cold-brewed coffee with their fellow founder-preneurs.

When it all comes to nothing or they've been diluted to 0.0001%, they can tell the story of how they were screwed over by evil capitalists, or humble-brag about how the company was sold for X million without disclosing the fact that they received less pay-out than a redundancy from McD's.

I've heard the BS so many times it becomes a comedy after a while. "My tech start-up": The dinner party property brag for the priced-out generation.

Edited by Bear Goggles

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1394470751[/url]' post='1102480891']

VC money isn't free in that it costs equity. But such is the allure of the "story", that most tech start-up founders I know are in it for the dream, not the reality. They own none of "their" companies, but they can tell the story of being a tech start up founder based at silicon roundabout.

They can wear tight trousers, grow facial hair in the latest style and hang out in Shoreditch drinking cold-brewed coffee with their fellow founder-preneurs.

When it all comes to nothing or they've been diluted to 0.0001%, they can tell the story of how they were screwed over by evil capitalists, or humble-brag about how the company was sold for X million without disclosing the fact that they received less pay-out than a redundancy from McD's.

I've heard the BS so many times it becomes a comedy after a while. "My tech start-up": The dinner party property brag for the priced-out generation.

Bloody hell, that's so accurate it's not even funny. Nice post.

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VC money isn't free in that it costs equity. But such is the allure of the "story", that most tech start-up founders I know are in it for the dream, not the reality. They own none of "their" companies, but they can tell the story of being a tech start up founder based at silicon roundabout.

They can wear tight trousers, grow facial hair in the latest style and hang out in Shoreditch drinking cold-brewed coffee with their fellow founder-preneurs.

When it all comes to nothing or they've been diluted to 0.0001%, they can tell the story of how they were screwed over by evil capitalists, or humble-brag about how the company was sold for X million without disclosing the fact that they received less pay-out than a redundancy from McD's.

I've heard the BS so many times it becomes a comedy after a while. "My tech start-up": The dinner party property brag for the priced-out generation.

You may like this:

http://www.theregister.co.uk/2014/01/31/bongs_davos_diary/

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