Q&A Part 2 - Bonus Episode - solving the housing crisis, third-party management and rising rents, balancing investor returns, what do students really care about, data inconsistencies and how do the Housed team balance work/life?

This is the 2nd part of a very special episode that we handed over to you, our lovely loyal audience. We had part one before Christmas but we had so many questions, we had to have a part 2. So this is a bonus episode created just to squeeze in even more insight, opinions and questions.

So in the spirit of fairness, we will be pulling names out of a hat to decide what we answer and in what order. And we have a strict 5 minute timer for each answer. A lot of the questions are topics we have touched on previously so if we don’t quite get deep enough into the detail, check back over our past episodes from 2024 and hopefully we will have covered it all over the course of our two seasons.

• What can be done about inconsistencies in data and is this negating true collaboration?
• How can affordability and sustainability be achieved whist still meeting the demand of customers and investors?
• How would we tackle solving the housing crisis?
• Is the sector compromising on light when looking at what to build and where to build it and do students care?
• How would we balance affordability, sustainability and investor returns if we were to build our own PBSA?
• What does the work/life balance look like for the Housed team?
• Are the amount of third-party operators trying to win business driving rent up?

This episode is sponsored by mystudenthalls - check out mystudenthalls.com for all your listings needs. 

Transcript

SPEAKER_04: 0:00

Welcome to the 16th episode of Season 2 of How's the Shared Living Podcast. I'm Dan Smith from Resi Consultancy.

SPEAKER_06: 0:08

I'm Sarah Canning from the Property Marketing Strategists.

SPEAKER_04: 0:10

And I'm Daini Lee from the Property Marketing Strategists. Let's hear a quick word from our sponsor, My Student Halls.

SPEAKER_02: 0:18

How's the Shared Living Podcast is sponsored by mystudenthalls.com, student accommodation search. Let's find your place.

SPEAKER_04: 0:28

Thanks very much to Dan and the team at My Student Halls for sponsoring this season of Housed. Do get in touch with them. It's well worth it. The ROI that you will see is impressive and something that Dan can actually showcase in case studies. I've worked with various clients that have worked with them. And it is definitely worth reaching out to them to have a conversation at the very least. Thanks ever so much to Dan and the team for supporting us this season. So this is the second part of a very special episode that we've handed over to you, our lovely audience. And we had one part before Christmas, but we had so many questions in from you that we had to have part two, which we're going to kick off 2025 with. So in the spirit of fairness, we're going to pull the names out of a hat and then decide what we answer and in what order. We are going to put a timer on it as we did with the last one. Strictly five minutes. That's primarily aimed at me, I know. And we will deal with all of these questions as we go. We've touched on a lot of them previously. So if we don't quite get deep enough into the detail, do check back over our past episodes from 2024. And hopefully we've covered all of that over the course of two seasons. Let's do this without further ado. On with the questions. Sarah, do you have the hat?

SPEAKER_06: 1:36

I do. I'm delving in and I've got the first name. And we have a question from Nick Findlay, who kindly sent us a voice note.

SPEAKER_01: 1:44

Hi, Nick Findlay here from City Room Rentals. Firstly, Sarah, Dini and Dan, congratulations on the Howes podcast being an excellent content this year and it's certainly no mean feat to launch a podcast and relevant content coming week after week. I think you've raised some superb issues this year that have shed some light on difficult subjects that have then been adopted wider into the sector and explored further. So thank you for that. Moving on on to my question with increasing pressures from rising construction costs regulatory changes and evolving student expectations how do you envision the student housing sector balancing affordability and sustainability while still meeting the demands of both students and investors in 2025 and beyond

SPEAKER_04: 2:36

what a great question that was from Nick thanks very much high praise indeed Nick also has a podcast that's Nick from City Room Rentals yeah it's a really interesting one. I think you can have various measures of balancing people's expectations. And that's, you know, from investors to residents, to then the wider world with the sustainability, you know, impact that you may have. Now, it is just it's really tricky to balance up affordability and sustainability, in particular with new developments, getting things off the ground, because it's very difficult to offer an affordable product in both BTR, co-living and PBSA. And it's then even more difficult to do that. And and do it sustainably. Because yes, these sustainability measures that are typically put in place, whether it's onsite power generation, energy management, they do have an initial upfront cost. Whilst they do have a decent payback time now, it is still seen as slightly prohibitive. So really difficult to marry that up. How much do you do? How far do you go in the sustainability side of things? How affordable can you make it? It's all about those certain levels of affordability and sustainability in particular. We know that residents want affordability Everyone wants good value, of course. Not everyone necessarily wants an affordable product. Someone might want a premium product and that's great. But I don't think right now we can build for anything less than what you'd have to charge 220, 240 pounds a week for in terms of an en suite in PBSA in particular. And so that puts a lot of other challenges in play too, in particular sustainability, which is normally one of the first things to be value engineered out of a project that is not necessarily going to make the numbers stack up as it is. So, I mean, it's the holy grail and trying to manage that balance between affordability and sustainability whilst delivering for students or residents. Yeah, very, very difficult balance. It's all about the levels to which you can go, to be honest with you.

SPEAKER_05: 4:29

Yeah, I think as you were kind of talking, as I said, it's difficult. Is it impossible? No. I don't know. I think I wrote down like a square because I think there is affordability, there's sustainability, there's students wants and there's what investors wants. And you can't do all those things and please everyone. I think is ultimately where I got to. And it means all those things have to be compromised and that's going to be a continual adjustment or discussion or review or assessment to work out which levers you can pull as far as you can pull them. And I think that is what we need to be doing as a sector, which I think, as we said on the last episode, I'm not sure we're really doing that enough. I think we're hoping that construction costs are going to come down, interest rates are going to come down and that it'll be all right and we'll keep building what we can build. But I think long-term viability of a property, if you make it affordable, it's got more long-term viability. If you make it sustainable, it's got more long-term viability. And the one thing that we need in this country is houses and homes. So I think if you look at it in a short and a long-term investment, not short-term investment, then maybe those metrics start to stack up in different ways. I'm not an investor. I'm not a numbers person, but That would be kind of my approach is looking at those compromises, looking where you can pull different levers in different ways and think of it in the long term. As you say, Dan, these are investments when you make investments in sustainability. And I think affordability is probably an investment, but it's what we need. And if there's a need for it, then it will continue to sell. It's not easy. It's not going to be easy. No one's got the answers, but we all need to come together and try. And I do have faith that we've got the skills, resources and innovation in the sector to do that. But we do need to start doing it because time is ticking.

SPEAKER_06: 6:09

I don't know. I think I've got a different view on it. I don't think affordability or sustainability are a compromise. I don't think It's a question mark. I think they're both absolutely needed. I don't believe that we should or could be building anything that's not affordable for the customer and isn't sustainable. There's different levels of sustainable. There's the tick box exercise that everybody's doing because you have to. You have to build buildings that tick a sustainable box. There's taking it to the next level to really future-proof it, to your point, Dini, to make it a real asset for the future. But we can't not build buildings that are sustainable and you know as you know if you've listened a lot when we talk about sustainability we're not just talking about the environmental sustainability as in the resources used to build it but also how sustainable is the product for the future and we've talked last week about changing of planning we've talked about the ways that students are going to be studying differently in the future and the only way of making sustainable buildings is to be making three and four bedroom flats so they can can be repurposed to something else and looking at the layout. So I think it is possible and I think it's absolute must. I get your point down. There is a market for not lower end basic products, but there's so much of it out there and everyone just keeps putting their price up year on year, despite the fact that the buildings are dilapidating. So there's no need to build any more of those as far as I'm concerned. If you're a developer, you have to be building something in some way and that will be a different project. We've absolutely smashed

SPEAKER_04: 7:59

through the timer there, but I just want to dwell on this slightly. What actually is affordable? And I think we're not really saying what that is. I mean, for me, for an en suite, it's probably between 100 and 150 pounds a week. For a studio, maybe between 125, 175, possibly up to 200. But who's that affordable for? I think we have to make sure that, you know, and ultimately that will be self-regulated. If you are building unaffordable beds or you are putting those prices at unaffordable levels, residents will not live there. It's really that simple. But we have to do so much more future-proofing. And then also what is sustainable? Is it very good? Is that good enough now? it's definitely not going to be good enough in five years' time. So why are you just building to that level now? Now, the levels do move on. I appreciate that. But there are some developers that are really thinking outside the box here and saying, actually, we need to be BREEAM outstanding now so that maybe in five years' time that might be at BREEAM very good because levels will move on. And I think that that's what we need to be doing. We have to be future-proofing these assets. You can't just build what we've always built now. We've got to be innovating and future-proofing. And I think that that long-term play is ideal, Sarah. We've got to make sure that we're focused on the long-term, or Dini, possibly you said it, because a lot of short-term investors, they want to make their money. They're not as worried about sustainability. And that has a role to play in getting markets going in certain ways. But equally, the long-term investors are where you're going to see a lot more focus on affordability and sustainability because they are going to be really focused on actually The next question

SPEAKER_06: 9:40

comes from Richard Powell from Unilife.

SPEAKER_00: 9:43

Hi guys, Richard here from Unilife. I've come into the PBSA sector after more than 20 years in hotels. One thing that I've noticed is the lack of consistent shared data compared to what I'm used to in hospitality. I think there's a huge opportunity for PBSA operators, universities and other providers to collaborate more effectively when it comes to their assets. to data. How do you think we can better share insights and better understand student behaviours between other providers and the university so that we can really focus on improving the overall student experience.

SPEAKER_06: 10:23

Great. Thank you, Richard. I'll go first with this one. Yeah, I completely agree. And I think that other sectors probably are shocked when it comes to our sector. I think a lot of it comes to people are really secretive about what they're doing and don't want to collaborate. We've seen it all the time before. There's operators that won't even let you in their building if they think that you're asking questions. And you've got to go back to who are you doing it for? And we did talk about this last week. Who is the customer? Why are we here? What is the purpose of our sector? And we're only going to really make waves in the sector, I think, by collaborating and stop kind of being so closed to collaborating and sharing the you know data really because there's so much wastage I think there's so many people that are off on their own doing the same thing you know and if if you know that there's three developers wanting to build in a city and you all know who each other are because you've all seen the planning permission surely that there's a way of working together to kind of make sure that you're not overlapping on what you're providing that you're being competitive that you've all got a space in that market that you're all talking to the universities together I mean you Universities tell us all the time that PBSA developers aren't even speaking to them and they don't even have the courtesy of telling them that we're building in your city. You know, that's not acceptable. And I know it's difficult to talk to universities. It's really difficult to find the person and to get a time with them because I think a lot of them are quite close to it because I think that when a developer comes to talk to them, they just think that you're asking for nominations and you need to make it clear you're not. You're just being friendly. You're just there. You're just creating a relationship because you're providing a service for their students and it's really, really important. So I don't have an answer, Richard, other than we've literally got to bash those barriers down.

SPEAKER_05: 12:22

I think I always get really embarrassed when you go to Europe and people talk about the UK being this mature, established market. And yet we're still not doing stuff like this. And if we're not doing it, then why the hell are we not doing it? And I suspect those markets possibly are doing it. So yeah, I don't know what the answer is. I think we talk enough on this podcast about collaboration, communication, working together as a sector for the greater good, which if there's ever a time that that's needed, it's now based on the last conversation we've just had. So yeah, we should be getting smarter with our data, smarter with our insights and using that to make our businesses better, both for students and investors.

SPEAKER_04: 13:01

Totally agree. Richard is from the hospitality sector, effectively, and he's fallen into PBSA, as it were, as I did. I'm from the hospitality sector too. And there are very different data sets available in hospitality. There's a huge amount of dynamic pricing, real dynamic pricing, where there are systems that track all the occupancy of all of the hotels, et cetera, in any given city. It allows people to push their prices up or down in true dynamic pricing fashion. That is what dynamic pricing is relying on. And I think that's what anyone in hospitality would expect is in the PBSA sector already. But it's very difficult to do that with the kind of purchase that student accommodation or even BTR is, where it's a bit more of a one-off purchase. You're not selling it every single night. So it's less of a market. And there have been some issues in the States with potential price collusion with certain systems. And it's worth having a quick look into that. But that has recently sort of fallen away. So that shouldn't be too much of an issue now. And that was primarily focused on multifamily in the US. So I think that, you know, anyone in hospitality would expect that there should be more occupancy data to enable you to, you know, to kind of understand how to set your pricing properly. but also more data on how do you keep your residents happy? How do you work with your universities? And there just isn't really that data, either to do the market research in the first place, to do the feasibility studies, but then on an operational perspective. Now, Richard and UniLife, I know, are very proactive in terms of the way that they work with their universities. That's absolutely vital, but there's still not enough of it. And I think we need to be really, really open. There's a few bodies that help with that collaboration, but I don't think that It's taken up often enough, and I don't think we do enough. You're right, Sarah, to call out developers that are building in a city or even trying to get planning permission in a city without having even spoken to the universities. And now there are some councils like Southampton, like Glasgow, like Nottingham, where every planning application is mandated to have spoken to the university and effectively the university have to sign off on whether or not they think that is a viable proposition for their students and that is a bit actually a bit of a quandary for certain universities because no head of accommodation wants to stop any pbsa development realistically because the more pbsa that's built the lower the occupancy gets across that city and then the prices start to come down so accommodation becomes cheaper university then benefits so There needs to be more collaboration. It has to come from within. We've got to make sure that that happens. We're trying to do that on housed. I try and do that through consultancy. I know you do as well at the property marketing strategist. So let's hope that operators also follow suit as well. But yeah, data is still a huge problem across the board and it's not allowing us to make those key strategic decisions.

SPEAKER_06: 15:55

I just wanted to add one point that just came to mind. I think it was at ISEF 2023, we heard from kind of a collective from the Netherlands about how they're all putting all of their great brains together to come up with like a master plan for housing and for student accommodation. So yeah, there are, like you said, Dini, there are examples in Europe that are making this happen and collaborating better than we are in the UK. Next question. I've got my hat. Who is coming out of the hat? We have a question from Rebecca O'Hare.

SPEAKER_04: 16:25

So Rebecca is from Leeds University. She is the Queen of Accommodation and Student Experience there. Her question is, considering your recent post on burnout, what do you all do to unwind and how do you maintain She then goes on to say, I think it's an opportunity to publicly talk about a topic many of us shy away from and stop glorifying the hustle.

SPEAKER_05: 16:59

Yeah, badly. I don't achieve any of that very well, basically. In fact, I was handing over raffle tickets for the million and one raffle tickets that you have to do as a parent over Christmas to someone the other day and went, sorry, I haven't done this because I'm failing at most things in life right now. So, yeah, it's hard. It is hard. And I think it's right that we should talk about it. And I think it's right that, you know, it's it's hard for everyone regardless of whether you're a family and I think sometimes as a woman you feel you can't talk about having a family because you think that means that you can't cope and it's like it is hard that it's a lot to juggle that you're trying to remember I'm trying to remember four different people's diaries in my head about what's got to be done and when so yeah it's not easy plus Sarah is workaholic and I have to remind her to sometimes not work when she's working and I'm not working I then feel guilty so I'm like Sarah please go and stop working

SPEAKER_06: 17:53

I think, I mean, that is a good point. I don't want to make anyone feel bad. I love the sector. I love work. And rightly or wrongly, I think a lot of the research and the insight that I consume is like a hobby. okay it's my work as well but I genuinely really enjoy it I do to caveat my son and lives with his dad half the time so I have more free time my son and my stepkids are teenagers so I have more time than Dini and Dan do because your kids are much smaller and need you much more my son is quite needy I had a child at school incident yesterday as well as a missing cat temporarily and my boiler broke so the overwhelm is real I was very much feeling it yesterday and I don't think I was massively productive with work and I told Dini that my mind was elsewhere I was having to deal with quite a lot of stuff yesterday so it's it's not easy I don't relax I don't enjoy relaxing that sounds

SPEAKER_04: 18:51

terrible we hadn't noticed so

SPEAKER_06: 18:53

yeah my brain space comes from running or going to the gym or baking or cooking I don't really feel like I benefit a great deal from sitting and doing nothing again I that's kind of active relaxation same as Duolingo I'm learning Spanish I actually really enjoy my 10 minutes that I spend a day working on that so it's different for everybody I hope that we're not glamorizing it it doesn't feel very glamorous so I hope that we're quite realistic with with what we put across

SPEAKER_04: 19:23

I think something that's got me through a saying that's got me through some fairly challenging personal times is that everyone has their own shit going on and I think that however much it looks like we're absolutely nailing it and yeah, I've started an AI business and whatever. It's hard work. And you do have to enjoy what you do. That is a bit of a luxury. And we say this as consultants with flexibility and our consultancies are going well, but it does take a lot of hard work. What I'm realizing, and as I get slightly older and move very firmly into middle age, I start to realize that it's all about the efficiency. And so I need to maximize the time that I have for the things that I'm best at and ultimately outsource the rest, whether that be employing people or whether that be outsourcing to an agency or whatever it might be. I need to focus on my strengths and what really gives me a buzz. Like Sarah, like Dini, I absolutely love the sector that we work or the sectors that we're working in with. PBSA, BTR, CoLiving. I love ESG. I'm really fascinated by AI and the impact that's going to have. And I try and position the consultancy so that I'm working on things that I love and that it's playing to my strengths. And so I've just taken on a fantastic executive assistant, Louise, whose husband, Andrew or AJ, is well known to the sector. I am outsourcing whatever I can that is an admin task to make sure that I can cope with the day-to-day work. And also I'm working with some really talented consultants as well who are able to do a lot of the work with me. And it means that I can take on more. That's what I'm good at. I'm good at the business development side of things. I'm good at talking about the industry, certainly good at talking. And so I need to focus on that and really, really building that up. And then, you know, like I said, I enjoy what I do. So I'm happy to spend the hours doing it. I have to make sure that I have that work-life balance. I've certainly got that wrong in the past. And I think that I can get kind of consumed by it. It doesn't mean I'm absent. It just means that I am always able to just jump on the computer or just send a quick email or whatever, whenever something comes into mind. But to really fully switch off football, that is my passion. To watch my boys playing football or to play it myself. I play twice a week. And that is the time where that's just for me. I don't have to think about necessarily being a dad. I can watch the boys, of course, but when I'm playing myself, I can just get on with it. And I do love that. And that is a bit of escapism, I suppose. So we'll see what happens when I have to give that up. But I'm a goal keeper I can probably play till I'm 70 if they'll have me at Bista Vets so yeah I think there's ways that you can mitigate a really complicated personal and professional life you just have to be able to get to a level where you can do that and I feel like I've reached that stage now where I can acknowledge it.

SPEAKER_05: 22:07

I have to say that I have a very helpful partner now husband that enables me to do what I do as well and I think I couldn't answer that question without you know without mentioning that and I think also we've got a great team behind us and I think that enables us to deliver more and friends and your whole network will help you achieve the best of yourself day to day, I think. And I think that's important. But just back to Rebecca, I think she's right to raise it. I think we're right to talk about it. And as you say, Dan, I think everyone's going through stuff all of the time and that's something we've got to remember so that we all understand and have empathy for everyone's situations.

SPEAKER_04: 22:40

Totally agree. You need a good support network around you. Well done for mentioning that. And yeah, I'm going to be in the doghouse for not mentioning that in the first place. So although Em's not going to listen to every episode now, so I should be okay.

SPEAKER_06: 22:52

Yeah. and my partner too so let's not leave the partners out because yeah but what I would say is just lifting the veil a little bit I guess on the myth is we have a great team that work with us and you know LinkedIn can make us look very busy and we're not talking about anything that's not true but we have a brilliant marketing manager Joe who together with our content creator Faye they create all of our LinkedIn posts for the property marketing strategist Dini and I approve every single post and we create a lot of the ideas for it, but we're not sat there at seven o'clock on a Tuesday morning writing this. It's scheduled sometimes a month in advance, our content. We use a scheduling tool. We use Canva for the creative. We have weekly team meetings. So there's a lot that goes into making it look seamless, but it's a lot of work. And we do that for a lot of our clients as well, shameless plug, because it is really, really hard to keep up that level of online presence.

SPEAKER_05: 23:51

And that's why my personal linkedin is quite sporadic because i don't have i need to get joe doing it for me

SPEAKER_04: 23:57

yeah you do now i i am slightly different to that i i do wake up and think right this is key time that people are going to be reading because they're waking up and they're just starting or they're on their commute and so sometimes i'll schedule you know every now and again i'll schedule something for the for the night before but quite often my my body clock just wakes me up at six o'clock anyway so i'll wake up i'll spend half an hour on linkedin or i'll read the news i'll read what's going on or i'll think about some of the questions i've been asked during the day before or whatever it might be so i do need to plan my linkedin content a little better but i feel like we've got such an opportunity all of us and a platform and a profile to be able to talk about some of those really difficult subjects as we do on this podcast too but yeah i definitely need to get better at scheduling that it's all written by me unless i'm summarizing something in which case i every now and again get chat gpt to summarize something but i'll then put my spin on it so i probably need to find a way to to do that a I love that. I love the content creation piece. It just is quite time consuming.

SPEAKER_06: 24:55

Great. Let's move on with the next question. And we have a question from Mitchell Singh from Fresh.

SPEAKER_04: 25:01

Yes, we

SPEAKER_03: 25:02

do. It's a juicy one. Do we think that the number of operators trying to move into the third-party world is having an influx on the rental level and the reason why I say this is because you know according to your research Dan there are 25 people trying to do third-party operations and an investor will have an idea of what money they want and you know we'll pull together a budget and say this is what we it will cost this to operate we believe this would be your income if they don't like those numbers they will find an operator who will give them the numbers they want because that operator obviously wants the work so they'll go around enough to get the number they want and then that third party person who's won that work now has to somehow get those numbers that are kind of unachievable but they've put them out there to win the work just want to know your opinion on that

SPEAKER_04: 25:49

love that question I'll take a first run at that now Mitchell's not I've only recently come into contact with him really when he started at Fresh I'd never actually met him until he started at Fresh relatively recently he was at CRM before then and he's very candid about his thoughts on where the third party sector's up to he's seen the good and the bad. I've found it fascinating. Resi Consultancy, we do some third-party tender processes. We still have three live at the moment in various different locations. And so I've seen it from end to end as to how these processes, firstly, how I would run them, and secondly, how the operators approach them too. And I think what I was expecting is that there's a few operators off the top of my head who would come in with a And I've been pleasantly surprised that actually there is much more parity between a lot of the operators. And there's still somewhere in phase one where I'm looking, comparing OPEXs and revenue budgets side by side. They might be a way off. I haven't seen anyone being really overly optimistic, partly because I think the markets that I'm doing those tender processes in are actually quite challenging. And therefore, people are a bit more reticent to put that really high revenue budget in. I do appreciate what Mitchell's saying. And I think that it all depends on what that investor or developer wants. Do they want to flip the building within a year? Do they want to just refinance? If they want to do either of those things, then they're probably going to go for the operator that has the highest possible revenue, low management fees, low OPEX, and therefore their NOI will be pretty good. They can show that to a bank or whoever and then move the property on. They don't necessarily mind about the long term performance. performance and an operator may then have to pick up the pieces a little bit later on if that revenue budget was too optimistic, for example. That definitely has been a major problem in the past. There's a lot of investors still dealing with that now. And when there's any volatility in a sector or in a city, then that will be a problem for an investor and the operators will often get blamed. Well, I saw this on your proposal during your tender process during the beauty parade. Why isn't it matching up to the reality? I think there has been an element of salesmanship in the past and overly optimistic budgets. I'm seeing that less so now, but it is still something that I have to be really mindful of. When we're writing our reports that showcase each of these operators to the investor or the developer, which is always the client for these tender processes, I need to make sure that when the CEO of a company in three to five years time of, you know, imagine a Matt Merrick at IQ, for example, when he reads one of the reports that that is either recommending an operator or talking about the operators objectively and each of their proposals, I need to make sure that that proposal doesn't just go with the one with the highest revenue and the lowest OPEX. I've got to make sure that there is a balance of how we're looking at it, what we're looking at in terms of know reputation review scores we're canvassing previous clients and previous investors etc and making sure that we're just doing our due diligence on each of the operators so gone are the days where yeah you can just rely on the fact that that's the case but there are some developers and investors out there who won't pick that they won't they're looking for a long-term hold and they want a realistic approach but will that then cost the operator that is giving a realistic approach the business in some of those other pitches yes definitely But do they want that business if they know that the building is going to get flipped and then someone else is going to come in and buy it? It's a real challenge. And that's something that Mitchell has to deal with on a day-to-day basis from the operator end. And I've been impressed with what I've seen in pretty much all operators, but they're not all made equal. There are some that are definitely better than others, and that might be a geographical thing. It might just be a scale thing. It might be an experience thing. I do think there's a lot more work that needs to be done on standardizing some of this some of the third-party work and to improving the way that investors think look at third parties. That's my 10 pence worth, which is definitely more like 10 quids worth. But yeah, great question from Mitchell that.

SPEAKER_05: 30:07

On the question of kind of is the third party management process pushing up rents potentially, because if people are trying to win business, they're going to try and make that look the best possible thing it can be. And I think that's probably not been helped by the market conditions that we were in, in the last two, three years where everyone saw that demand was higher and knew that they could push those rents up because of where demand was. Obviously, the impacts of that we're now seeing in the market. now. And possibly they probably are because that is what we've been seeing and what's been happening. But I come back to the point that actually rent is about an optimum rate. It's not about a maximum rate, because if you maximise the rate and it's wrong, you're going to have occupancy issues. And those occupancy issues are going to hit you probably for two or three years when you've got that reputation for that high price. So I think there is that due diligence piece from investors in understanding actually what the market is doing. And I think probably the last year has probably given operators a little bit more confidence to push back on investors and say, well, actually, This is what we're seeing. You know, if you want us to fill the building, this is where we need to land and this is where we need to be. And that's probably been a good thing for the market all told. And hopefully that's a place that we can stay in where there is a little bit more trust and dialogue and conversation between investors and operators.

SPEAKER_06: 31:23

I think you two have been really thorough in your answers, so I'm not going to go on too much. But I think the only thing I'd add to it is, you know, I understand that, you know, operational costs are being driven down to win business, but that's not necessarily sustainable in the long term and again let's come back to the customer let's come back to the question that we answered before the Christmas break about people as well you know there's only so far that you can push the management fee down and the rents up because you can't then fulfill the expectations of the service and the product that you're providing with such a low OPEX. So I don't think that's a sustainable model moving forward. Let's move on to the next question. We have a question here from Natalia Maximova from Shepherd Robson. And she said, is the sector compromising on light when looking at what to build and where to build it? And do students care? We know the answer to this because we've asked the question and the students in our Property Week panel a few weeks ago actually talked about this. And I think, again, we have to come back to who's the customer. Where do you want to live? Where do you want your home to be? Because if you want to look out of a window and be two metres away from a brick wall, I'm pretty sure that's not what you want. Therefore, why are we expecting young people in their homes to be living with that? The student in our panel made the comment that, She didn't know that her room was overlooking another building. But on the other side of the corridor, her friend had loads of light. And she didn't understand why she didn't know that when she was booking the room, because she would have chosen the room with more light. You then have to ask the question, who wouldn't choose the room with more light? Obviously, everyone wants natural daylight. It's better for their well-being. It's going to be better for their studies. It's going to be better for their circadian rhythm. There's a reason why we all want light and yes i think people probably are compromising and that's down to planning in city centres and cramming buildings in but i don't think we should be surprised with students being disappointed when they move into a room that they weren't expecting to be dark or overlooking another building i

SPEAKER_05: 33:31

think it comes back to the sustainability point if you're building homes for people to live in you want them to have longevity and they're not going to have longevity if they don't have light or good light or the maximum of light so it needs to be a consideration and it needs to be maximized and built in a way that it's maximized so that you get the best for those residents.

SPEAKER_04: 33:51

I totally agree. I don't actually have anything to add to that, but I, well.

SPEAKER_05: 33:56

Of course you do.

SPEAKER_04: 33:59

So when I first started in the sector, I was surprised that there were, that you didn't have pictures of each room and that you didn't have more details and know exactly what each room was like. And I think that's because it felt like there were so many rooms of each type that were exactly the same and that you didn't need to show what the view was or whatever. I think we're starting to see that a bit more now. There's some interesting bits of software that can show that and do show that. It's a bit like when you book a football ticket, for example. You can actually see exactly what the view is from that seat or a concert ticket. Well, surely we should be looking at that in... btr and student accommodation and co-living because if we're not then when the student gets there or the resident gets there and they're pissed off because they've got a terrible view or they're on a lower floor than they were expecting then that's on us so the you know the solutions do exist i think we just need to basically do do a better job of it to be completely honest

SPEAKER_06: 34:54

great next question comes from basically PBSA royalty from Bob Crompton, who used to be my boss at Knightsbridge and the student housing company. We have covered some of this, but it's a really, really good question. So how do we deliver the homes we need? There is a shortage of PBSA, senior living, BTR, HMOs, houses for sale, and in the very niche of our society. The government seems to understand we need homes, but they don't understand how to deliver them. Can we have a strategic discussion and not get bogged down by policy and BS? So, you know, our kids might not still be able to get a home and Angela Rayner doesn't necessarily have the answer. So what do we think? No holds barred, blue sky, brainstorm strategic discussion. How are we going to solve the housing crisis, Dan and Dini? They're both looking at me blankly.

SPEAKER_04: 35:47

Yeah, that is the ultimate question. I mean, we need to diversify the sort of options that we have in terms of the housing that we've got. That's for sure. And PBSA has a huge role to play in that. BTR does too. CoLiving does too. But it has to, again, be at a range of a range of levels of value and affordability. We have to make sure that we have enough houses that are affordable for people, and not just the people that already have houses and can move. First-time buyers, how the hell do you save for a housing deposit right now in the current environment with the way wages are, et cetera? So you've got to improve that sort of financing and access to housing. And then you've got to think if it's rental operating costs, take a really long term view, make it as sustainable as you possibly can. And yeah, I mean, it's such a broad question. You could spend all day trying to answer this. I don't envy the government. They have one and a half million homes that they're planning to build. Is that going to be the right stock? That's the challenge that every individual sector has. Is the PBSA that we're building going to be the right stock for 20 years' time? No, probably not. So it's got to be future-proof as well, but then that comes with its own challenges. So, yeah, really, it's a great question. I think we do need to start thinking about some of the bigger picture of PBSA and what solution, and BTR as well, and co-living, and what solution each of those sectors is having on the general housing crisis. And you can imagine... know student accommodation what all councils want is they want their student hmo stock back into the market for general housing or private rented or back into residential sale like that's that's what councils want i've spoken to the vast majority of local councils out there in city councils with the feasibility studies that we do and they've all said the same thing they don't want student hmos they would rather have pbsas because it's easier controlled much you know more density in a in a smaller a smaller footprint and that just makes complete sense so i i do think that the renters rights act is designed to firstly, improve tenants' lives, but also to decimate the student housing market, the student HMO market in particular. I do genuinely think that that is, it's a bit of a by-product, but I think that's what will happen. But that plays into the hands nicely of what the councils want to see. So yeah, that's my 10 pence worth.

SPEAKER_06: 38:24

So I'm going to hit this at the other end of the market because I learned so much from speaking to Honor Barrett on the interview that we did with her over the summer. And actually, I think the secret to solving the health crisis is looking at the older generation and the fact that so many are living in houses with empty rooms. So if there was more later living built, for rental, then it would mean that those houses would be freed up and they could either be sold or they could be rented out, which would put more family houses back into the market, which would free up the smaller homes, the HMOs, et cetera, and it would have a big knock-on effect. So I think that Angela Rayner should be focusing on the later living end of the market and making it more attractive for older people to free up their homes without the fear of being taxed or their children being taxed or then having to use their money for care because there are ways around it. And I think that that's got to have a kind of a cascade effect down the ladder once that is. And we are going to have a much larger population of people living much longer, but we need them to free up their houses.

SPEAKER_05: 39:43

I think the answer is data. I think we need to understand data. similar to what you've both said that we need to understand what houses are need in each location and what's needed and I think the problem that we have with our housing development in this country is that councils get what is put to them they don't get to say well actually we need this so people go to them and say well I'm going to build this will you approve it and they have to approve it but really we need to shift that on its head and say we've assessed our local housing needs, this is what we need. If you come to us and say you're gonna build this, then we'll approve it straight away and we can get on with it. And I think that's what I'd do if I was housing minister is look at the data, look at the needs, look at the requirements and I guess incentivize people to build what is needed.

SPEAKER_04: 40:33

And please, please look at the planning regime and don't put in any rent controls. You know, it's counterintuitive to building more. I think the only way to solve the housing crisis is obviously to build more and that will then solve the affordability crisis. So I think there's, you know, there's a huge amount of work there to run at for sure. Angela Rain is going to be incredibly busy. Thanks very much to Bob for that question. And thanks very much to Anne Durrell from Derwent Students. We haven't had time to fully answer her question, but I do feel like we've answered that in Nick Findlay's, you know, if you were to build your own PBSA, what would you do to make it affordable? So fantastic. That was awesome. Really enjoyed that. Thanks ever so much for all your contributions, but also to listening so loyally to us every week during 2024 and this bonus episode in 2025. Happy New Year to everyone. It's hugely interesting for us. It's something that we'll definitely do again because of the reaction that you guys have had to it. And you don't need a special episode to ask us questions, though. You can just send Send us a message anytime. We'll do our best to answer your questions. Thanks once again to our headline sponsor, My Student Halls, for sponsoring the series. And please do like, subscribe and share so we can reach as wide an audience as possible and keep bringing you this weekly digest of news from the shared living sector. Happy New Year to you all and we'll see you all in our brand new season very soon.