Unite buys 3000 student rooms for £76,000 each as Uni applications are down 5%.

[Sancho Panza]

Telegraph 10/7/17

'Unite Students has bought a block of student accommodation in Birmingham for £227m - the largest single asset of its kind ever to come to the market.

The block, called Aston Student Village, serves Aston University with more than 3,000 bedrooms. It is the first on-campus accommodation Unite will own. The developer has traditionally concentrated on building its own blocks near the UK’s top universities, rather than on campuses themselves.

Unite partnered with Singapore’s sovereign wealth fund GIC to make the purchase, which was sold by the university and Lloyds bank.

Aston Student Village is currently the only student halls on offer to students at Aston University, which has a student population of 11,000 and is in the centre of Birmingham.

The acquisition of the property takes the number of beds Unite has in Birmingham to more than 5,000.

In total, the company provides a home for more than 50,000 students in 140 properties across England and Scotland.

Figures from UCAS showed that total university applications were down 5pc this year, with the biggest drop seen in students from the European Union, down 7pc. Students from outside the EU were up 0.1pc.

However, demand for university places remains robust, with demand still outsripping the number of places available.'

 

 

There are several aspects to consider here.

1) Firstly,the amount of money lent out to private student BTL's.Who are the banks going to save?Big customers with big debts,or all the little blokes with the odd place?

2) Student numbers dropping.This has been going on for a while as students realise they'll never clear their debts.HESA data available.Key figure to watch is UK domiciled columns.

3) More students studying from home.

4) The big banks/SWF's linking up to commoditise the student lettings market,potentially cutting up the businesses of the local BTL's at both ends via restricting recruitment via the Uni's and via tighter lending.

 

 

Interesting times.That hooting in the distance is the train coming down the line.

Edited February 11, 2017 by Sancho Panza

[spyguy]

Interesting how students lets pan out in the bigger cities.

76k room. Each room gives you 6k. Maybe another 1-2k for summer lets ou, conferences, etc.

1k maintenace.

First dib at students. Low default.

Ive heard demand for student hmos has fallen off cliff in leeds.

[Toast]

I have been expecting to see large drops in student numbers for a few years now, since people must surely realise that the benefit of a degree is dwindling compared to the level of debt one has to take on. The perceived "need" for a degree on your CV is keeping the numbers up, albeit that need is purely artificial, as it's used merely as a check-box by recruiters, rather than a true requirement of the job.

I have heard that a number of universities have borrowed heavily as well (oh, the irony!) on the basis of predicted increasing student demand and tuition fees. That model looks like it is going to be tested soon, if the trends continue.

The whole HE system (as has been discussed on here many times) is really screwed up, with PVC's on ridiculous salaries, seeing themselves as great business leaders, an erosion of standards and academic freedom, as students become customers (and in turn are so shackled with financial liabilities that once they have their finger trapped in the mechanism, they cannot drop out and start a different course), and runaway administrative hierarchies built on selling debt to the young and impressionable.

It looks like a shake-out may be coming.

[BristolBuyer]

That part of central Birmingham might be a special case, as it's within walking distance of the proposed new HS2 railway station. There seemed to be loads of student-related building and advertising going on when I wandered through it a few months ago.

[spyguy]

Some of the ex Polys look eye watering.

Theyve been operating in a unlimited borrowing environment. I know Huddersfield has made my eye brows raise.

Similatpr as BTL. Model never existed, so banks borrowers putting their own numbers in : student number rising 6% year, 9k tutition fees, etc etc.

Then numbers drop, normally by a fair chun. Left with empty buildinds, un funded pensions, students suing for fees and living cost as uni has failed to deliver.

Id love to see some HE VCs in court ustifying their fees and level of services, quality control. The whole HE sector is a trial lawyers playground.

[SpectrumFX]

35 minutes ago, Toast said:

I have been expecting to see large drops in student numbers for a few years now, since people must surely realise that the benefit of a degree is dwindling compared to the level of debt one has to take on. The perceived "need" for a degree on your CV is keeping the numbers up, albeit that need is purely artificial, as it's used merely as a check-box by recruiters, rather than a true requirement of the job.

I have heard that a number of universities have borrowed heavily as well (oh, the irony!) on the basis of predicted increasing student demand and tuition fees. That model looks like it is going to be tested soon, if the trends continue.

The whole HE system (as has been discussed on here many times) is really screwed up, with PVC's on ridiculous salaries, seeing themselves as great business leaders, an erosion of standards and academic freedom, as students become customers (and in turn are so shackled with financial liabilities that once they have their finger trapped in the mechanism, they cannot drop out and start a different course), and runaway administrative hierarchies built on selling debt to the young and impressionable.

It looks like a shake-out may be coming.

You're right that for many jobs these days the possession of a degree is asked for when it is not really required.

The trouble from a young person's point of view is that it is asked for. And whether it's genuinely needed or not it is therefore needed.

Thus universities have become the gatekeepers to most decent employment, and are being enriched as a consequence.

Requiring unnecessary degrees is also useful for a bit of on the sly age discrimination.

[999house]

3 hours ago, spyguy said:

Interesting how students lets pan out in the bigger cities.

76k room. Each room gives you 6k. Maybe another 1-2k for summer lets ou, conferences, etc.

1k maintenace.

First dib at students. Low default.

Ive heard demand for student hmos has fallen off cliff in leeds.

Is that in private rented small LL's or big institutional landlors?

 

When I was last year about 4 or 5 big developments were being built that provided thousands of additional rooms.

[Democorruptcy]

I can see student accommodation being bought up to house pensioners. Possibly taking advantage to sell them to pensioners using some governbankment "help" scheme to encourage them to downsize from family size houses.

[spyguy]

Id guess therel be a 30% drop in uk HE numbers.

Going by chats to parents whos kds have a 50k loan, a BA in arts/,hum and a job they could have done at 16. 

[gibbon]

I personally think this is good business for Unite seeing as they've now got access to vast amounts of free cash. Keep building and take any short term pain of under-occupancy/zero profits/losses while you push every student HMO slumlord out the market. Doesn't matter if student numbers are dropping as long if you're taking a bigger slice of a shrinking pie.

[cashinmattress]

1 hour ago, fru-gal said:

So there are less HE students now than in 2006/2007 !

See the HESA interactive graph on the right hand side; https://www.hesa.ac.uk/

Education is a massive contributor to the money creation machine in the UK circa £10b annually.

Something not right in having 2m graduates year on year (about 500k of the graph is non-dom students).

Especially when a HUGE lump of 'graduates' are coming from business/admin, social sciences, arts & design, communications & languages... just less than a million a year!

With the bonus being of a high proportion of them having a big student debt.

What the hell are we supposed to do with all these people?

How are we doing to force the growing legion of 55 and over crowd into retirement?

Anybody that thinks the UK can stand on its own two feet is misinformed.

 

[malk]

There's a well documented demographic drop in 18 year olds which is contributing to this a little but the medium term outlook for non top universities is very poor now that undergraduate place capping is much reduced.

The high fee regime is supremely misguided but I don't think it's currently a problem for recruitment, students know it is funny money and won't be paid back. It's a graduate tax , just a badly designed and probably unnecessary one. What will make a massive difference is if the SLC is sold off and someone tries to turn a profit on that loan book. Students will pretty quickly realise that degrees aren't worth punitive private sector loans.

All this said, longer term I think the outlook could be positive. Yes the managerialism and ridiculous executive salary culture needs to be curtailed and the piles of pointless bureaucracy got rid of but fundamentally we have the best HE sector in the world and the income from foreign students, in fees, accommodation, other contributions to the economy is immense and has no downsides. In addition, the economy doesn't have enough jobs and with automation likely never will again. Educating the population is a good thing and largely enjoyable. A population with more time will need something to do.

[jiltedjen]

Aston is a really good university and not an ex poly. i really enjoyed my time there.

The new accommodation in question is pretty massive, replaces the ancient towers, stafford tower etc. 

Aston most famous for its business school, and i think Aston university must be seeing a change in student numbers to flog it all off soo quickly. 
Aston is very popular with many nationalities, its a very diverse university.

 

Edited February 11, 2017 by jiltedjen

[reddog]

Must admit if I were a student I would prefer to be in something like that, than some damp terrace with a landlord from hell. (Although the price of that sort of accommodation is eye watering).

 

Overall I would say most people could gain the knowledge they gained from attending university, just by looking at YouTube videos and  a few audio books. (I studied chemistry so it might be a bit different for me, but not that much).

 

I think in the future, the period from say the late 1950s until now where 18 year olds would see it as a right of passage to go live in another city, party on cheap beer and do a bit of studying will be seen an anomyly of a bygone age. (Not saying I didn't enjoy it, they were in fact some of the best years of my life, but I am not sure societies of the future will be able to waste money like that)

Edited February 11, 2017 by reddog

[Darby Ram]

The boom in student-specific housing is an under-appreciated part of the housing bubble, in my opinion. It's largely down to a recycling of government debt, with the externalities of higher overall housing costs shifted onto non-home-owning taxpayers.

- Developer builds student housing.

- The development is backed by a university, which is backed a capital grant from the government, or it is backed privately on the basis of future rental income, which comes from student loans, a proportion of which will be written off by the taxpayer at some point in the future.

- Developers get to conform to laxer building standards for student housing than for normal residential properties, and then charge "luxury" rates for tiny rooms.

It's a classic "privatise the profits, socialize the losses" scam, but the losses are punted so far into the future that nobody can be bothered to fix it. In a similar way to ratcheting up housing benefit with earnings, building expensive student housing as the monopoly supplier, with naive students paying for it on the never never, provides a false floor for rents. 

[Patient London FTB]

16 minutes ago, Darby Ram said:

The boom in student-specific housing is an under-appreciated part of the housing bubble, in my opinion. It's largely down to a recycling of government debt, with the externalities of higher overall housing costs shifted onto non-home-owning taxpayers.

- Developer builds student housing.

- The development is backed by a university, which is backed a capital grant from the government, or it is backed privately on the basis of future rental income, which comes from student loans, a proportion of which will be written off by the taxpayer at some point in the future.

- Developers get to conform to laxer building standards for student housing than for normal residential properties, and then charge "luxury" rates for tiny rooms.

It's a classic "privatise the profits, socialize the losses" scam, but the losses are punted so far into the future that nobody can be bothered to fix it. In a similar way to ratcheting up housing benefit with earnings, building expensive student housing as the monopoly supplier, with naive students paying for it on the never never, provides a false floor for rents. 

Great post. 

It also builds up resentment against landlordism among the next generation - student rent strike

[BlokeInDurham]

Certainly in Durham, there are numerous places at various parts of the city where flash new student "apartment block"-style developments for rent on a per-room basis are springing up at this very moment, as well as new official university capacity.

Some of this is no doubt aimed at projected large growth in student numbers over the next decade (the word is that university bigwigs expect an "expand or die" period in the near future across the sector). But as a new concept at least locally, it will be interesting to see how this accommodation pans out with the traditional shared house student digs.

[Digsby]

Oh phew, I was worried for a moment there with the drop in university applications that education might become less profitable and more affordable.

To my relief, demand is still "robust" and outstripping supply, so no universities have to be closed to lower supply beneath demand, and vice chancellors can continue to earn 3 times the prime ministers wages.

[SarahBell]

9 hours ago, BristolBuyer said:

That part of central Birmingham might be a special case, as it's within walking distance of the proposed new HS2 railway station. There seemed to be loads of student-related building and advertising going on when I wandered through it a few months ago.

students are council tax free. one non student and council tax is due?

Edited February 11, 2017 by SarahBell

[Sancho Panza]

9 hours ago, spyguy said:

Interesting how students lets pan out in the bigger cities.

76k room. Each room gives you 6k. Maybe another 1-2k for summer lets ou, conferences, etc.

1k maintenace.

First dib at students. Low default.

Ive heard demand for student hmos has fallen off cliff in leeds.

You've also got to consider the maintenance required for one large building with 3000 rooms will be considerably less than that for 3000 rooms spread across 1000 houses.

I've a good friend who's been involved in some aspects of these builds and he says that foreign students(particularly) as well as domestic students prefer these lets.Many only charge during term time (whereas ye olde Rachman wannabees are still trying to charge summer retainers).He was saying that when you add in the security aspects as well,that a lot of parents prefer them for their kids.Also,bills are generally chucked in and there's none of the haggling over the deposit that you often have with private LL's .

In Leicester a lot of the student LL's who owend in the less salubrious areas were bailed out by the arrival of many migrants who didn't know the area or their rights since 2000.

[Sancho Panza]

9 hours ago, BristolBuyer said:

That part of central Birmingham might be a special case, as it's within walking distance of the proposed new HS2 railway station. There seemed to be loads of student-related building and advertising going on when I wandered through it a few months ago.

A lot of new developments are within walking distance of the Uni's.Brum Uni's are next to areas that aren't maybe the most student friendly.

These builders know their business.Even a lot of the risk is offloaded to private investors whilst the builder retains the servicing contract(which is where the real money is)

[Sancho Panza]

6 hours ago, fru-gal said:

So there are less HE students now than in 2006/2007 !

See the HESA interactive graph on the right hand side; https://www.hesa.ac.uk/

Wow,I hadn't noticed and I study those numbers a few times a year.

The tables I read normally only cover the previous couple of years so you don't pick up the generational trends.

The breakdown is interesting to me particularly when it comes to UK domiciled students.

I've noticed that many Uni's now do online courses for their degrees eg London Uni...........

The end is nigh.

Sadly we don't see much of the venerable Ayatollah Bulgeri these days but he was a great source of info back in the day.

[moneyfornothing]

9 hours ago, SpectrumFX said:

You're right that for many jobs these days the possession of a degree is asked for when it is not really required.

The trouble from a young person's point of view is that it is asked for. And whether it's genuinely needed or not it is therefore needed.

Thus universities have become the gatekeepers to most decent employment, and are being enriched as a consequence.

Requiring unnecessary degrees is also useful for a bit of on the sly age discrimination.

The public sector is the biggest culprit forcing these barriers of entry ..

[Nabby81]

Load of these Student accommodation blocks built in Luton and more to come despite Uni saying there is enough accommodation already ,so what is happening with all these rooms ...

https://www.airbnb.co.uk/rooms/7009689?checkin=18-03-2017&checkout=&guests=2&adults=2&children=0&infants=0&s=5MaGyJJp

 

 

[macca13]

15 hours ago, Sancho Panza said:

Telegraph 10/7/17

'Unite Students has bought a block of student accommodation in Birmingham for £227m - the largest single asset of its kind ever to come to the market.

The block, called Aston Student Village, serves Aston University with more than 3,000 bedrooms. It is the first on-campus accommodation Unite will own. The developer has traditionally concentrated on building its own blocks near the UK’s top universities, rather than on campuses themselves.

Unite partnered with Singapore’s sovereign wealth fund GIC to make the purchase, which was sold by the university and Lloyds bank.

Aston Student Village is currently the only student halls on offer to students at Aston University, which has a student population of 11,000 and is in the centre of Birmingham.

The acquisition of the property takes the number of beds Unite has in Birmingham to more than 5,000.

In total, the company provides a home for more than 50,000 students in 140 properties across England and Scotland.

Figures from UCAS showed that total university applications were down 5pc this year, with the biggest drop seen in students from the European Union, down 7pc. Students from outside the EU were up 0.1pc.

However, demand for university places remains robust, with demand still outsripping the number of places available.'

 

 

There are several aspects to consider here.

1) Firstly,the amount of money lent out to private student BTL's.Who are the banks going to save?Big customers with big debts,or all the little blokes with the odd place?

2) Student numbers dropping.This has been going on for a while as students realise they'll never clear their debts.HESA data available.Key figure to watch is UK domiciled columns.

3) More students studying from home.

4) The big banks/SWF's linking up to commoditise the student lettings market,potentially cutting up the businesses of the local BTL's at both ends via restricting recruitment via the Uni's and via tighter lending.

 

 

Interesting times.That hooting in the distance is the train coming down the line.

Student accommodation being built everywhere in Kingston, loads of houses down my relatives road are buytolet, you can tell as they are filthy dirty and have rubbish everywhere as they don't do recycling and the bin police refuse to take their rubbish.. also traffic cones in front garden ?

http://www.yourlocalguardian.co.uk/news/local/kingstonnews/10670922.Residents__anger_as_Cambridge_Road_estate_student_flats_scheme_is_approved/

2 massive developments just going up, that will hurt the buytolet for sure.. must be well over 700 rooms+ That I know of going up including the above.. maybe I underestimate the area but it must make some difference.. there are not many pubs left to turn into flats?