The purpose-built student accommodation (PBSA) London Plan Guidance (LPG) gives detailed advice on how to apply London Plan Policy H15 to best meet London’s housing needs.
The intention is to shape the design and development of PBSA including balancing it with other housing types, with an aim of facilitating delivery. There have historically been huge challenges with obtaining planning permission on PBSA schemes, and the PBSA LPG looks to tackle this.
Why publish the guidance now?
It appears that London is, and has been for some time, experiencing increases in demand for good student housing year on year, as more domestic and international students relocate to London. Although there has been a gradual increase in PBSA in London, this has not been at the rate to sufficiently meet the demand. This has resulted in rents being pushed up, causing students to be 'priced out' of PBSA and resulting in increased pressure on the private rental market/HMOs.
London appears to face an overconcentration of PBSA in certain areas, resulting in less diverse neighbourhoods. The guidance aims to tackle this by stipulating which areas face more saturated levels of PBSA and which areas are more in need of new, high quality PBSA.
Delivering affordable student accommodation
One of the key goals of Policy H15 was to cultivate the delivery of affordable student accommodation and the guidance goes a step further on this. Providing affordable student accommodation (at levels of 35%) can make a planning application eligible for the fast-track-route. It is important to note that maintenance loans have not kept up with the rise in inflation, which in turn has resulted in students not being able to afford the high-end PBSA rental demands. The rise of construction and operational costs continues to cause concerns and therefore developers have to constantly battle with viability challenges.
The guidance seeks to reinforce the policy aims of H15 to encourage local planning authorities to seek affordable student accommodation rather than conventional C3 affordable housing, and outlines criteria which may be taken into account when balancing whether conventional C3 housing should be required or affordable student accommodation. It should be noted that in any event, where PBSA schemes meet requirements of Part A of Policy, H15 boroughs should not require such schemes to contribute towards C3 (conventional) affordable housing.
The guidance also notes that affordable student accommodation is not eligible for CIL relief, which results in it being disadvantageous in comparison to C3 housing. It is suggested that boroughs should consider the affordable student accommodation requirements in the London Plan when revising CIL charging schedule and that they may wish to consider the viability of affordable student accommodation and apply nil or reduced rates compared to market PBSA dwellings based on the outcome of the viability assessment and where affordable student accommodation rents are secured.
The guidance also recommends the use of nominations agreements to allow higher education providers to allocate a proportion of the affordable student accommodation they don't otherwise control to their students. This reflects that housing education providers are likely to have the "best awareness" of who to prioritise when allocating affordable student accommodation, rather the local authorities. Nomination agreements will, however, not be required where the development is being built by a higher education provider to meet its own needs.
Addressing undersupply without stifling design
It is hoped that the PBSA LPG will play an instrumental role in addressing the structural undersupply of affordable PBSA in London, and in the undersupply of affordable student accommodation. It appears to create greater flexibility to Policy H15 but it is still open to local planning authorities to apply the rigour of Policy H15 if it sees fit. This is good to a degree, but there will have to be an element of caution not to stifle innovative design and development to ensure that PBSA schemes are suited to the next generation of students.
