
Housed: The Shared Living Podcast
Sarah Canning and Deenie Lee of The Property Marketing Strategists have teamed up with Daniel Smith of Student Housing Consultancy to discuss the latest news, views and insights in the shared living sector.
Each episode they will be delving into a wide variety of subjects and asking the questions which aren't often asked.
This podcast is a must for anyone working in Student Accommodation, BTR, Co-Living, Operational Real Estate or Shared Living.
Housed: The Shared Living Podcast
Cop 28, Later Living and fraudulent international bookings
In this first episode of Housed: The Shared Living Podcast Sarah, Deenie and Dan discuss why they launched this new podcast.
They also chat about some recent events they attended and the key insights they took away - Modern Women in Property and Construction Conference, Cop 28 and The Urban Ovation Later Living Discussion.
This episode also includes their findings and research on the possible fraudulent behaviour around international agent fees.
Housed: The Shared Living Podcast aims to bring the latest news, views and insights to the shared living sector.
Each week, Sarah Canning, Deenie Lee of The Property Marketing Strategists and Daniel Smith of Student Housing Consultancy will be delving into a wide variety of subjects and asking the questions that aren't often asked. This podcast is for anyone who works in Student Accommodation, BTR, Co-living, Operational Real Estate or Shared Living - this podcast is for you!
Resources:
Modern Women in Property
Urban Ovation
LoopLiv
Ryder Architects
Wonkhe
Disclaimer: The views and opinions expressed in this podcast are the personal views of the individual hosts.
Hello and welcome to the first episode of Housed, the shared living podcast. I'm Sarah Canning from the Property Marketing Strategists.
SPEAKER_02:I'm Daniel Smith from Student Housing Consultancy.
SPEAKER_01:And I'm Dini
SPEAKER_00:Lee
SPEAKER_02:from the Property
SPEAKER_00:Marketing Strategists.
SPEAKER_01:So this has been a long time coming. We've been talking about
SPEAKER_00:doing a podcast for a while. I think Well, you guys, I know, are big, big podcast fans, but I think we just kind of felt that we've got, we have lots of chats and we have lots of things that we talk about. And actually, instead of doing those in private, maybe it might be interesting for other people to hear those chats and maybe ask some of those questions that, because we're all a bit independent, we could ask that maybe... can't always be asked.
SPEAKER_02:It's all subjective, isn't it? I mean, whether it's interesting to one person, I don't know, but we'll see. But yeah, we've constantly had those conversations, haven't we? Summing up what we've done during the week and discussing any of the challenges, primarily the challenges. And so I do think it's interesting to break that down. I'm all for transparency. So I'm sure people have noticed on LinkedIn that I'm quite happy to call it as it is. And I think the work that you're both doing at Property Marketing Strategist is is making a huge difference to the sector and sort of democratising a lot of the data, the student data in particular. So more we can do of that, the better.
SPEAKER_01:Yeah, I agree. I think we're all quite busy people and because we're freelance, we get to meet amazing people all the time and go to lots of events. So I think it's really useful to sum it up really in this format because not everybody reads everything that we post on LinkedIn, shock horror, but maybe some people like watching content and some people like listening to content. So I guess we're covering all the bases here. So I guess on that topic, we've all been out and about doing interesting things and talking to interesting people. Dina, you went to the Modern Women Property and Construction Conference recently. What were the key topics being discussed there?
SPEAKER_00:Yeah, no, and it was a really great thing to do. And I think you've been to one before, Sarah, and I think as a kind of modern women thing, I think just it was such an inclusive, welcoming, a really comfortable environment where you could feel you could ask questions, you could, you know, you could do what you needed. So first and informal environment where even though you don't know anyone because it was totally different to the normal kind of networking that I do it was it was really great to be able to go into that environment and feel comfortable and safe really so first and foremost I think that was a really positive thing in terms of kind of the topics around kind of property and construction there was a lot of positivity around the property market and how they kind of feel that it's reached the bottom of its curve and that we should start to see that uplifting again a lot of the people talking in the room were investing in kind of prime London location but I'm sure that will impact the rest of the property sector as it drives forward. And obviously, we know there's lots of still challenges ahead of that. But I think that's a positive message that is good that we're starting to hear at the start of 2024. And hopefully, as we move along, that will start to continue to get those positive messages. Another big topic was around recruitment. And I've been hearing quite a lot about this. And I think at the end of the Property Week conference, it was mentioned by a couple of panellists there around kind of lack of getting people into construction. which is making those build projects and those kind of challenges that we're facing kind of in this housing crisis all the more harder, really. And I just I kind of don't We don't hear as much about it in the PBSL sector as maybe we should and kind of what the impact of that is. And obviously part of that conversation was apprenticeships, which you'll know, Sarah, is another passion of mine and something that I'm always talking about, not just in construction and vocational, but across the board, how we need to be using apprentices. And also apprenticeship degrees was a big discussion there as well and about how loads of people, there was a recruiter there that people had worked on kind of big infrastructure projects and doing a degree. Obviously, that's another discussion around We're always having Sarah around what's the impact of that accommodation when people doing degrees can't live in that accommodation. So lots of talk there around that recruitment. And finally, one which I hadn't heard before was around COP28. And obviously, that had happened at the back end of last year, and that there was some, it kind of hinted at some decisions that were made around COP28 that would impact the sector. But I haven't really heard anything about that. So I think there's kind of more to go and investigate on there and see what that impact is, and just keeping an eye on that regulation and making sure everyone's ahead of the curve, really. So I think they were the key topics for me.
SPEAKER_02:Yeah, that's great. I think, I mean, obviously, not being a modern woman, I wasn't at that conference.
SPEAKER_00:You're welcome to calm down well it's
SPEAKER_02:a nice it's a nice antidote to the all-star panel at property week which caused a little bit of a little bit of uproar but uh but equally there's so much work to be done on you know equality in the pbsa sector so i think the more that we can see those events the better that are promoting yeah i suppose engagement and and more women in the workplace in particular in pbsa and real estate in general it's it's there's a lot of blue suits there needs to be because you know of course there's there's a lot of a lot of finance a lot of investment but at the same time there is absolutely no reason why we can't have more equality right now so i would like to see a lot more of that those events are a really good starting point for sure
SPEAKER_00:yeah and i think down the road the good thing about it was which we don't often do because we do end up in kind of our insular sector events where it's all the same people it was really nice to just have a more about other sectors and sometimes I think sometimes we're a bit too insular and maybe we need to step a little bit more out of you know I always say that people in our sector don't see themselves as part of the built environment or real estate which seems a bit madness really because we clearly are but yeah I think it was a welcome change to going to the same event where it's the same people and and just one sector that we're talking about.
SPEAKER_02:Yeah, that's the danger of real estate that we can end up siloed in, you know, BTR, PBSA, co-living, later living, whatever else it might be. There's so many sort of... transferable skills that you could take from one industry to the other, that anyone could take from one industry to the other or one sector to the other. And, you know, there's so many shared learnings that could be taken as well. So again, the more sort of cross-pollination and cross-collaboration that you can see, the better.
SPEAKER_01:At the Property Marketing Strategist, we're doing a bit of research into that, the kind of networking space and event space. So we'll share more in a future episode.
SPEAKER_00:And I was going to say, Sarah, you also went to the Urban Ovation Later Living event as well. Was that this week or last week? Well,
SPEAKER_01:it's funny we're talking about events and the format because actually it was a format that I really enjoyed. It was in an evening and it was like drinks and nibbles and it was very casual. It was two hours. It was on a Thursday evening at Rider Architect's office in London and it felt really casual, really informal, really open. And I went as a guest of Loop Live team who are busy working away behind the scenes looking to develop later living. Now we can have a debate another day about the terminology of later living because we're not convinced that it's the right terminology. But for the purpose of this, we're talking about rented property for the over 55s. So Ryder Architects and Loop Live presented. And What's a really potentially difficult concept to get your head around is why would the older generation rent? You know, there's a lot that have homes. And what we discussed was 4.6 million over 55s nationally want to downsize, but... They're also scared of the potential future investment loss for their beneficiaries, basically. They want to keep hold of those properties and they might want to downsize, but they don't necessarily want to down quality. And in some respects, they'd quite like to, you know, they might live in an older property and they might want to actually up quality. And so there's all this going on. Maybe they want to try living in a different location. Maybe they want to try city living or they want to try seaside living. So the point really is that this whole kind of rented later living sectors, not about forcing older people to sell their properties and rent because that's not really going to solve anything. But the point really is that there's all of these people that have probably are empty nesters, but they've got large properties. And those large properties could be used for families that desperately need housing. So the vision really is that people with lots of empty rooms, that they don't want to sell their house, they can keep their house, they can go and rent somewhere, have an amazing experience, brilliant quality, you know, luxury living somewhere maybe different, rent their existing house out, which will pay for the rent, in their new rented property and allow either family members you know young families or you know the wider rented network they're also talking about actually you know people can move into really nice rented maybe they want to do home improvements maybe you know they are living in an older property and they they love technology you know they love smart smart technology but they can't have it in their house well actually they can move out for six months go and live somewhere amazing get some work done on their property and it increases in value if that's their intention so there's a lot loads and loads of reasons. But I mean, the diagrams and the data that we saw about all of these empty houses and how many of those rooms could be used for kind of the greater good of people that desperately need housing. So it's a really exciting sector. There are developments like that at the moment. We haven't seen lots of them yet, but I think it's one to watch. And I think The whole conversation about rental, I think there's two potential blockers to that model. One is renting, generally. I still don't think it's accepted. I think our government, for as long as I can remember, are pushing home ownership. And actually, there's lots of benefits to renting. And hopefully, with the kind of the BTR and co-living model, maybe that is becoming normalized. And the fact that people realize that they probably can't own a home until much, much later, hopefully that positive attitude about renting will kind of seep into the later living sector as well. But also it is that later living, and we're not talking about people who need care. We're not talking about retirement living. We're talking about that middle, which isn't catered for. There's loads of retirement living and care homes, and they're being built brilliantly and operated wonderfully. But you've got that kind of probably 55 to 75 year age group, where I said they're empty nesters. They've got big homes. They're not ready to go into retirement, but where... you know, where do they go? So yeah, I was fascinated, learned a hell of a lot and met some really, really interesting people. This podcast isn't just PBSA, as some people might have thought.
UNKNOWN:It's very much shared living.
SPEAKER_00:Yeah, and what's really interesting about what you were saying there, Sarah, about it's not only that your family could move into your big family home and you could go and live in a city. Like we've always talked, you know, some people might know I recently left London to move to the country, but actually retiring in a city is a much more sensible thing to do. So instead of your... children renting in a city they can move to your kind of your out-of-town house and they can go and live the city life you know and their children are paying the rent because they've got the house so yeah that's a really interesting concept why I thought about it that way so
SPEAKER_01:right and one thing that I have listened to and recently which really fascinated me and I just thought this has got Dan's name all over it on the Wonky podcast there was a debate about possible fraudulent behavior around international agent fees I know Dan this is something that you've spent a long time reading searching and exposing. What's the latest?
SPEAKER_02:Well, yes. So the agent fees are slightly different in terms of the fraudulent behaviour that I've exposed. It was very much around PBSA accommodation bookings. I know the Wonky podcast is brilliant. I listened to that episode and highly recommend anything they do. Same with ISEF as well. Martijn van Veen is an absolute pro. So well worth listening to the ISEF podcast. He'll be discussing various elements of agent fraud as well. But in terms of PBS and what was seen later in the market last year and also at the start of this year. It's probably important to set the context first. So we have a university funding crisis. So the universities are crying out for international students because they're higher fee payers. We'd just come through COVID. And so there was a bit of a, you know, there was pent up demand there from international students, but domestics as well. And we have a student housing crisis in the UK, which obviously means that there's very little accommodation. I know Richard Ward at Stu Rents thinks it's going to be, we're going to be short of around half a million beds by 2026. So that means that later in the market, especially, there's going to be little to no availability. And I think that, you know, that creates opportunities and it creates a risk as well. So it's an opportunity for people to exploit it, whether it's marketplaces, individuals, companies, agents. But also it's a big risk for the marketplaces in particular and the students in that there will be no availability a bit later on in the market. And we certainly saw some of that play out in terms of that availability issues. But there are a lot of factors at play. I know people want me to point the finger at one particular actor here. I don't think I can because I think it is, like I said, a multitude of actors at play. onto the saga, as it were, what happened was Roughly August, September, I got a few calls from some operators, pretty big operators, very credible, that were effectively saying, where are the Chinese students? Where are the bookings? Because the cancellation rate coming through was pretty astronomical. So I did a bit of digging, spoke to a few marketplaces, a few agents, and sort of started to try and uncover what was going on. Now, I was told very much that it was a flight to quality. The Chinese students in particular were a bit more discerning this year. It was kind of Russell Group or nothing. And that meant that that. Ultimately, the tier two universities and beyond were struggling because students were kind of trading up and they were looking to go to Russell Group universities. And if they didn't get in, they were going to Australia, the US or Canada. So that was sort of the start of it, but it didn't really explain these extremely kind of high cancellation rates. So I did a bit more digging into that. And I have to thank the guys at Viva City WeChat mini programs because they helped me do quite a lot of the digging, of course, because a lot of it was on Chinese social media. But yeah, we effectively looked at the social networks. We looked on UK forums as well. And we found there were a lot of people reselling rooms. There were a lot of sort of students just trying to get sublets. And that was quite sort of striking in the sense that it hasn't really happened before. Yes, if you suddenly need to go away or your visa doesn't get approved, Normally, it would be, you know, the operator would just kind of let you out of your contract with the no visa, no pay, or, you know, no study, no pay, etc. But what we're seeing, this was on a mass scale. So I think that was part of the issue in that students were possibly price gouging. And so this wasn't just a case of that it was one actor, and it was marketplaces or it was students or it was criminal gangs or whatever these students were effectively seeing that there was dynamic pricing going on in pbsa the prices were starting low they were buying those rooms and then later on in the market they were trying to sell those rooms on If they couldn't sell them, then that was on them to either try and to have to make the payments or on the operator to try and recoup the money ultimately. But also then you can kind of come at this from a marketplace side of things too. And I think that's one of the challenges that all marketplaces have at the moment. They have very little availability later in the market. So they're all desperate to secure that early on. And so what we found on social media were some marketplaces and agents were adopting quite aggressive tactics in terms of telling students that they could book pretty much anywhere they want, book accommodation anywhere they want, and then they could cancel any of those at any time. Now, that is obviously not true because once you've paid your deposit and you've signed your contract, you're effectively liable for that room. So as much as the marketplaces wanted to try and get those bookings in, wherever they were from and wherever they were for, they were ultimately leaving themselves liable. Now that of course doesn't wash with the operators because operators are always gonna be sort of trying to hold marketplaces to account. And that was one of the key challenges I think that the operators faced that there was a bit of a danger of, well, hey, if I call out this behavior, Will I not get as many bookings from this marketplace next year? Maybe, who knows? So yeah, that was a challenge, but operators ultimately launched their, you know, it kind of went quiet after that. Operators then launched their rates in sort of October time and Scape were quite early out the blocks, True, Grayson's, and then Homes for Students and Unite. They launched pretty quickly. And straight away, each of these operators, I'd say the majority of these operators, certainly the big ones, saw fake bookings coming in. And they were coming in en masse. It wasn't just that they were just the odd fake booking here and there. And by fake booking, I mean that these weren't genuine students that were being put into the property management systems and through the booking engine. They were fake names. and they were fake email addresses but effectively the email addresses some of them had been set up by bots and they've been created in the qq domain which is obviously a chinese email server and it yeah it ultimately meant that this was happening en masse rooms were being reserved but luckily the operators were were catching it i think that you know whether it was individuals going through the booking engines or the bots going through the booking engines and placing tentative or confirmed bookings. I think that that was partly also to do with the fact that operators have been quite lax in terms of not putting deposits back in, not checking IDs for every student, not checking university admission letters, et cetera, or having international guarantors. During COVID, everyone dropped that because it was, you know, all hands on deck, just get the bookings in. That was one of the reasons I think why some of these bookings kind of went through. But equally, the bots were pretty sophisticated. There was a lot of IP traffic coming from China, also coming from India, but also coming from North America. And some of these operators blocked certain IP addresses because they were seeing huge amounts of traffic to their sites and also that they were getting through into the booking engine. That worked to a certain extent because it kind of calmed a lot of them down. Some genuine marketplaces that use, that sort of will scrape pricing and availability, et cetera, were kind of up in arms. They were like, hey, you blocked us, what's going on? So those genuine marketplaces were typically okay. But yeah, that was a real shock to the system for the operators that their IT teams were having to go through pretty shocking traffic and pretty shocking activity from bots or individuals as well. So some of them blocked these fake bookings. And it was clear that all of this traffic was very, very unusual. The good news is that in sort of publicizing what was going on, these mass block bookings, we sort of brought it to awareness and we stopped some other operators going through the same thing. We recommended some of those measures to put in place that I've just mentioned. And that did help to guard against it, the sort of taking deposits, checking IDs, and making sure that you were following up. That was one of the key things that was exposed, I think that some operators later in the market last year that were kind of stung by some of these late cancellations hadn't actually followed up fully with each of the student's But when it came to, you know, first installment time, they were panicking because they'd seen, right, that money's not coming in. That student actually doesn't exist. So, you know, yes, it's a lot more legwork to get the IDs in and, you know, make sure that you've got a capture on your website. Every PMS can offer that. So just make sure that you've got a sort of capture on your website form. That should get rid of some of the bots. You know, who was behind it? This is the million dollar question. And I do think that one or more agents or marketplaces were too aggressive in trying to sell student rooms. And they may have placed a certain number of bookings to then try and resell them later on. And securing that availability early in the market than finding a genuine student later on in the booking cycle. And I think, you know, they were placed quite early on some of these bookings and it just became so obvious this year after in sort of, you know, October, November time, that operators were able to be a bit more vigilant. But I think shouting about it on LinkedIn just made everyone else have that conversation. I know that some of those conversations were had at quite a high level in certain operators. But, you know, so I do agree that there's a flight to quality here. So I do think that some of these Chinese cancellations are because students have decided, I'm not going to go to this tier two university. I'm going to go to a different university, a Russell Group, or I'm going to wait and go to Australia or the US or wherever else. And so that definitely did have something to it. But yeah, the agents and marketplaces, I think there's a certain amount of focus on scale or nothing. Get the bookings in. It doesn't matter. Now, this isn't all marketplaces. I'll just be really clear on that. And I think that Some of those practices are just, you know, particularly aggressive sales teams, maybe, who are, you know, really focused on hitting their targets, etc. So totally, totally understand that. But, you know, in terms of who else could have been involved, definitely, it could have been just individual students looking to price gouge and looking to buy low, sell high later in the market. And then if they could, then great. If they couldn't, then then they didn't have to worry about it because they effectively had put fake names in and the operators hadn't necessarily checked up on it. So that's certainly one element of it. I wouldn't go so far as to say it's triad gangs or anything like that. I just think it's either individuals price gouging or it's those marketplaces. But how can we guard against it? Well, you've got to be pretty vigilant in terms of what your web traffic is looking like, your system setup, making sure that you've got that capture form, making sure that you're taking deposits. That's one of the key things because obviously anyone is going to place a booking and possibly hold on to it. And we all know that operators love to declare good occupancy to investors, whether that's a tentative booking that hasn't fully confirmed or a confirmed booking. So I think looking at your systems, making sure that that's the case for, you know, that you've got all of those checks in place in particular. Not necessarily that, you know, everyone needs an international guarantor because that can put certain markets off. But the interesting thing was that, you know, the repercussions last year were, you were felt massively that these cancellation rates from China in particular were anything up to sort of 20% across the board for different operators. Didn't just hit smaller operators, hit some of the bigger operators too. And I've recently was sent a list of availability in certain assets, certain PBSA assets across the country And it was really alarming. There's availability in Glasgow, in Durham, in York, in Bristol, in these places that should be completely full. And I don't think that operators have been sort of talking enough about the fact that, yes, you know, last year was a great year for occupancy, but actually a lot of them were caught short by the sort of fake booking scandal, as it were. So, yeah. I'm pleased that we managed to guard against it a bit more this year. Drawing attention to it definitely helped people talk about it. There are certain measures that you should definitely be putting in place if you're a PBSA operator. I'm not convinced that we're going to have the same kind of problem this year. because I think there will be more availability later on in the market. I'm not 100% convinced on the strength of certain international markets. I think Russell Group will do just fine, but we'll see how we go the rest of the way. So it's going to be really interesting to see how things go with dynamic pricing, of course, as well, because that definitely plays into the student psyche of, well, hey, if I buy now, great, then I could potentially sell it on later on. And potentially, it may be that some marketplaces or agents were doing that too. So all in all, this isn't this isn't just a whodunit. And I can say it was, you know, Professor Plum in Shanghai and whatever. But it's it's very much about being vigilant and working closely with your marketplaces and agents to make sure that they aren't being too aggressive in the sales, that they're not just spraying and praying, as it were, and putting out multiple different bookings to different places, because they do that for universities. Obviously, students apply to multiple different universities. They should not be doing that for accommodation. And that's one of the things that we need marketplaces and agents to stop in particular. But also, it's then guarding against the subletting, too. And making sure that in terms of your sublets, you're really getting involved. If you are allowing subletting at all, understand who is subletting from who and how it's working, because you really need to make sure that you know student a that's having to resell the room and student b that's come in and is subletting you don't want student b to be paying an extra 150 pounds a week that's no good for anyone so again the onus is very much on the operators here but it's on creating those relationships with your students and with your marketplaces and agents to make sure that this doesn't happen again so i'll keep everyone posted as and when i hear more from certain operators but it does seem like it's died down a bit and hopefully that will continue
SPEAKER_01:and i was going say we've got so many more questions about this because there's so many routes and I think even from a marketing point of view we're seeing the fallout from that. I think we'll save that for part two.
SPEAKER_02:We'll serialise it in a Netflix documentary I'm
SPEAKER_00:sure. I will just say quickly though the one Other sad thing about all that is when you do hear about rooms in Bristol and Glasgow, that there's actually probably students that couldn't go to university or didn't go to university or was commuting. And that is, you know, that's a real impact of those empty rooms that it's, yeah, it's just, it's not just... It's long, long ranging, that impact.
SPEAKER_01:Great. Well, thank you so much for listening, everyone. And let us know any other topics that you want us to cover. This podcast is about all aspects of shared living. It's a fascinating and emerging part of the sector, both property and real estate. And we want to cover as much as possible and bring the latest news, views, research, insight, opinions to your ears. Thank you again. And we'll catch you soon for episode two.