What exactly is Single Family Housing and do we consider PBSA a home - and should it contribute to the Labour housing targets?

Episode 7 in series 3, Sarah, Dan and Deenie discuss:

- The Class Foundation Community Marketing Hub insights
- Takeaways from the Bisnow SFH Event including tech, ESG, branding & the potential of the sector
- PBSA’s contribution to Labour’s housing targets

Plus hear about the launch of Ask the Expert: Submit your questions!

Our sponsor for this season, theEword  are true experts in digital marketing specifically for the property sector.

We are also delighted that MyStudentHalls are continuing to sponsor the podcast, Mystudenthalls.com - Find your ideal student accommodation across the UK.

Each week, Sarah Canning, Deenie Lee of The Property Marketing Strategists and Daniel Smith of RESI 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, Later Living, university accommodation, Operational Real Estate or Shared Living.

Disclaimer: The views and opinions expressed in this podcast are the personal views of the individual hosts and guests.

Transcript

SPEAKER_03: 0:00

Hello and welcome to the seventh episode in season three of How's the Shared Living podcast. I'm Sarah Canning from the Property Marketing Strategists.

SPEAKER_01: 0:08

I'm Dan Smith from Resi Consultancy.

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And I'm Dani Lee from the Property

SPEAKER_04: 0:12

Marketing Strategists.

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And let's just hear a word

SPEAKER_02: 0:15

from our sponsor. This episode of How's the Shared Living podcast is brought to you by the eWord, digital experts in driving leads and putting people in your places.

SPEAKER_03: 0:25

Thank you so much to the E-Word for being such great sponsors of Housed. We love the insight and the digital trends that they bring to the sector from renters. Make sure you access their latest report. And thank you, of course, to Dan and the team at My Student Halls for sponsoring this season. More from them later. We had a week off last week, so I hope everybody had a good week. Me, Deanie and Dan were all involved in half term in various ways. So I think it was a good move to take a break. But That does mean that we have a bumper episode today because we've got lots to catch up on. So I'll kick off because I tuned into the Class Foundation Community Hub and I know that you two didn't. So it was really, really great. I think as a kind of, me and Dini have been involved in the live community hubs at the class conference for the last two years. And this is a way, I think, of making sure that people stay in contact and share best practice throughout the year, not just once a year in person. And it also means that people can start kind of, I guess, dipping their toe in certain themes and getting to know each other virtually before the real events every year. So it was great. It was very, very well facilitated by Romy from Nido. And she did a great job keeping everyone on track. Not easy to kind of create a community online with really good attendance as well. And it was people from all over Europe, which was just, you know, just brilliant to see. So I know, Dina, you couldn't make that one. And I know that you're you know desperate to attend the next one I

SPEAKER_04: 1:58

was going to ask really about the format and that because it is hard to manage communities online and so I was going to ask kind of how that works I assumed it was well attended and that there was a lot of people that wanted to chat and and share best practice I guess so it was great

SPEAKER_03: 2:14

There was an agenda and they made it clear up front that you didn't have to speak if you don't want to. There's obviously people maybe that are kind of new to networking that maybe would have felt the experience intimidating. So not everybody spoke, which was absolutely fine, but there were people that did. And I think what was great about how Romy facilitated it was she pivoted. If there was something that actually came up that people seemed quite interesting, then we went off and talked about that. And actually there were some people that wanted specific advice from like France, for example, and they were able to bring that to it. So I know that on the, I think it was the same day, maybe the day before, there were different community hubs going on as well. This one was the marketing one. So yeah, I'm sure that all of the other ones were equally as well attended and successful. So yeah, I look forward to kind of really being part of those throughout the year and hopefully making those kind of in-person events even bigger and better in future.

SPEAKER_04: 3:08

And it's great for that. opportunity for marketers to get together which I think was one of the things that was absent when we first started working together Sarah so I think it's great it's a great addition to see that progressing and giving that opportunity for marketers to learn from each other and grow and develop.

SPEAKER_01: 3:25

I think the more structured that you can have that, the better. When I look at where I get the most value from the sector and from those kind of events, it is in the networking. And how do you then take that beyond what you've just spoken about at the actual event? Most of my events, I suppose, then go on to a WhatsApp group or then you just get your individual little, I suppose, conversations that happen afterwards. So it's great that I think that sounds like a really good structured way of doing it. I'm sure Romy did a great job as well. So yeah, good to see that for marketeers in the sector.

SPEAKER_03: 4:04

Yeah, definitely. And the other thing that we've been doing, hot off the press, Dana and I went to the BizNow single family housing event this morning. We actually had to hot foot it back to our, I was going to say studios, but that's over-egging it a little bit. back to our home offices so that we could record this because we wanted to make sure that we could kind of convey everything that we learned this morning really while it was still fresh in our minds and kind of off air Dan and I were just saying that We were concentrating really, really hard. There was a lot of content during a kind of a three-hour morning session, effectively, and we were both super engaged and really, really interested. So, Dan, I know kind of single-family housing, I guess, is probably a little bit newer to you than Dini and I. We have been to some other single-family housing events. What was your take on it?

SPEAKER_01: 4:57

I really enjoyed it. So thanks, first of all, to BizNow for inviting us along, and we are open to going to the opening of Envelopes anywhere It's not something that I've ever really dealt with, single-family housing, and I found it genuinely fascinating. It is a very small part, effectively a subsection of BTR at the moment. There really aren't that many beds. I think, what was it, 10,000 beds in total, I think, that there are single-family housing across the UK at the moment. Now, single-family housing is effectively... housing for rent. It is not your BTR blocks. It is effectively a house. It might be within a specific estate or a community where they're all single-family housing. They're all for rent. Or it may be just one pocket here and there, a few assets, or just an individual asset in a town, and then another one somewhere else. There is some serious institutional investment there. That was obvious by who was in the room. Some really big capital players, pension funds, funders, banks, and it was a really well-organized event. Like you said, I've got literally 10 pages of notes here to go through. It was pretty full on and I had to concentrate. Now, I opportunistically bought sfhconsultancy.com on the way in for single family housing consultancy because you just never know. And I can genuinely see where there are learnings that the sector, SFH, could have having looked at PBSA, BTR. So there's no surprise that there's like a, you know, Charlie Oliver from Curlie or Marcus Weeks from Firethorn that they were there to really... learn across from various different sectors. So there's a lot of transferable learnings there. I think the first session was the best by far. Then you had a bit more of a sponsor session, which I know you have to do. I get that. But the fireside chats are typically a little bit more painful to go through. And then the sustainability session as well. I know sustainability. I run a sustainability consultancy. We look after the ESG strategy for about 25,000 PBSA and BTR beds. Single family housing is really innovating, to be completely honest, when it comes to sustainability. And we can talk about the other panels in a second, Sarah, if you want. But I felt like it was a bit lazy in terms of the way that they were talking about putting solar panels on and maybe air source heat pumps and things. I would have liked to have seen much more granular detail on the exact reporting standards and the certifications that they were going to be implementing. Some of the tech, innovative tech behind it just felt like it's difficult enough. The overall impression that I got from the panel was that, yes, we understand that sustainability has to be important, but it's difficult enough to get houses built, let alone putting sustainability mandates in place in terms of the performance. And so I did come away thinking, ah, they're missing a trick there. There is so many things that they could learn from PBSA and also that PBSA should be learning from that sector too. But yeah, I didn't feel like there was a real focus on innovation. The one positive there was about Octopus Energy and the difference that Octopus were making to the sector. I've seen Octopus at another event relatively recently and I can see that they are pretty much an end-to-end sustainability solution, which is great. I think more of that, the better. But they weren't all in unison saying, yes, we definitely need to all do this and we definitely need to all meet these standards. So I think there's work to be done there, but on the whole, Yes, really enjoyed the event. I thought it was well attended. I mean, it was standing room only for the first few sessions. And I'll definitely be keeping my eye on the single family housing market. One very interesting stat that I, because I think we've got a real problem with terminology across the sector, is that 60% of tenants in single family housing, they're couples and singles. They're not families at all. So we're misleading everybody by calling it single family housing i think so i don't know there's definitely work for the property marketing strategists to do on acronyms and all the terminology within the sector i think

SPEAKER_04: 9:15

two things i want to come back on that last point i will come back on because we have already spoken about that but just on the sustainability piece is this much about that regulation isn't strong enough that actually people are just delivering to regulation and not trying to be innovative because you know as a rental house is It's going to be a long term asset. So therefore, there's this mismatch between our meat regulations. But actually, if you're going to hold on to that asset, you want to go beyond regulations to make it sustainable from a financial perspective and an environment.

SPEAKER_01: 9:46

Yeah, totally. We know that the government do not have strict enough standards when it comes to energy standards. legislation, energy performance certificates and things like that. So EPCC, if that's what it moves to in terms of single family housing or general residential housing, it's not high enough to to really drive innovation. And so there were panelists on there saying, oh, well, we're all EPCB. I'm like, well, hang on a minute. Why are you just EPCB? Surely if you're building new stock from scratch, you should be focused on EPCA at the very least. You could be taking this beyond into Passive House or BREEAM Outstanding or whatever else you want. But yes, that's why I came away a little frustrated and felt like there was a bit of a lazy approach to it, to be completely honest. I'm willing to be convinced otherwise. I think that it felt like it was just, well, we don't really have to do a huge amount. We've got to put some solar panels on, we think. But what else do we really have to do? And that's where I'd like to see some change there for sure. Maybe can help drive it potentially in some way, shape or form. But it has to come from government mandating, then the investors and the money, and then the house builders will actually get involved and say, Yeah, do you know what? You need your solar panels, you need your air source heat pump, you need your AMRs, energy monitoring and management and control and electric charging points and whatever else.

SPEAKER_03: 11:11

What is interesting though, which I hadn't appreciated until this morning's event, is... not all single family housing is intentional some of it has been bought off developers who haven't been able to sell their stock so i think therein lies the mismatch potentially with innovation and the environment because they're buying stock off developers who were building to sell who maybe hadn't given that long-term love into developing the product And it will evolve with time. But I think if we see more intentional single family housing being developed and built, we will see more of that innovation. I mean, on the last panel, I think they were saying, you know, in an ideal world, they would look at the local demographics. They would make sure that the houses that they're building complement the local area. So what is missing in the local area? Is it four bedroom houses or is it two bedroom houses? You know, there should be a mix of open plan versus separate rooms because that could suit multi-generation generational living, it could match work from home people, it could appeal to sharers, but they've got to be able to kind of really do that massive kind of land appraisal and local area piece to identify that. And in a lot of cases, they're not able to do that, because they're just buying whatever stock is there from developers that haven't been able to sell. They were talking about areas that are key and that kind of situation that I just talked about is particularly prevalent in kind of the southeast. They were saying that the West Midlands is outperforming. There's a spillage outside of Birmingham, that kind of BTR city centre living. People are staying there. I think you wrote those notes down, Dan. It's something like for 1.4 years, and then they're potentially moving into single family housing out in the kind of the West Midlands suburbs. So they kind of really said that they think that'll be the test bed for how well single family housing can do.

SPEAKER_01: 13:08

Yeah, I thought it was pretty staggering that the average lease term is 4.4 years in single family housing. You know, across multifamily or BTR, again, we really need to work on this terminology, it's about 1.2 years. So I think that's, it's a really interesting concept and there's a huge amount that single family housing can do to solve the affordability crisis within housing, I think. As long as they don't get too carried away directly And it seems like there's, you know, that the rent increases are reasonable, but not astronomical. So hopefully it does remain affordable. But yeah, looking at the areas that are super popular for it, Birmingham is the absolute darling of the alternative real estate sector at the minute. It's great for PBSA, great for BTR. And it sounds like single family housing as well. So it's a very different proposition to a BTR. I think that's the really interesting thing. But it's still such a small part of the sector. And I've checked it now. They said 16,000 beds across the UK, and there's about 110,000 or so BTR. So it's still a very small part of it. But in the US, it's absolutely massive. It's 10 times the size of that. So I think we do need to understand that there's a long way to go with single family housing, that's for sure. It's just kind of scratching the surface at the moment. But that felt like the right people in the room to be having that discussion. There was a lot of money in the room there. And so hopefully there will be a fair bit of movement on it if they can change the planning and that landowners don't get carried away and try and push the land prices up hugely because they can see the potential in single family housing or whatever else it might be. But it does seem like the right people are in discussions at the moment.

SPEAKER_04: 14:52

We do have this ability, though, to over-segment land. sector to the point that actually we're not really sure what it's delivering for the customer because I absolutely agree Dan if you're talking about 4.4 years average tenancy then actually that is probably you know young people who are looking to move out of the city want to whether it's start a life in a couple or live with friends don't want the hustle and bustle of the city anymore so it's not really single family housing and actually on other episodes we've talked about the increase of institutional investors in HMO and which is kind of part of the same thing. It's houses to rent for people looking to rent in different locations. But Sarah and I have spoken in the past around single family housing. It isn't single family housing because it's probably for sharers and all sorts of people who aren't looking to ever buy or not looking to buy or not in the market to buy at the moment or can't.

SPEAKER_03: 15:45

I think the interesting thing is they used Denmark and Copenhagen as an example because the more renters that you have, you know, the more renters there will be, if that makes any sense at all, because we're not going to be in a society where people can buy houses at all or very young. And they can't all just live in apartment blocks in city centres. It's the right thing for the right people at the right time. And some of them are super exciting. I don't disagree with that. But at some point, there is still you know, it's different to other European cities, I think, where people live in apartments for life. But in England, I don't think we're generally in that place for some reason. So there is this natural tendency to move out of the city somewhere, either suburbia or somewhere more rural, but they're going to need places to rent because even having families in 30s and 40s and older, you know, just don't think people are going to be able to afford to buy. So I think renters will, dictate the market really, because they won't be able to buy. And as I was saying this morning, it's not huge numbers yet, but you have to think that private landlords, those numbers will be dwindling for all of the reasons that we've talked about in previous episodes. So having institutional investors and professionally managed houses will replace some of that stock potentially if privately owned landlords are going to leave the market and put their houses up up for sale so yeah i agree with dan it's a very very small part of the market interestingly one of the speakers i think was referring to america and they call it single family rentals sfr which It's still rubbish, but I think it's better than housing because at least it has the word rental in it. But, you know, we've got to remember that none of these acronyms are ever used customer facing. I was on the train with a friend on the way to London this morning and I was explaining where I was going. And I said it and she was like, so it's houses for single people. And I was like, no. She was like, so it's houses for single parents. No, no. And I was like, thank God we don't use those acronyms, customer facing, because they wouldn't have a clue what we're talking about. You know, we are still talking about homes for rent. But I still think that the missing bit that isn't really being marketed, although it was mentioned this morning, is security of tenure. And For me, you can have all the bells and whistles and all the amenities and everything you want, but what people really want when they're renting is security. And if we are talking about families, that becomes even more important that they know that once they've settled their families and their children into local schools and into the community, and they're paying a rent that they can afford, that that landlord isn't going to sell. And people will only start to trust that when they see it happening, when there's a testbed for it, where there's testimonials, and when there's brands. And I'm not seeing those brands yet. So I think, yeah, we'd love to work in that market and kind of really work on that customer-facing communication. I don't think it's important enough at the moment because people just need places to live. So, you know... There's no demand issue, so there's not a problem.

SPEAKER_04: 19:09

Yeah, I also wonder if people are scared to promote that because as a country, we seem to think that renting is a dirty word and therefore it's not aspirational to rent for life. So therefore people are scared to say, hey, this is a place you can rent for life. But like you say, Sarah, I think that is easily overcomable and it is a massive benefit. And actually... even if it's not the aspiration to rent for life, it's the aspiration to rent for as long as you want is a pretty good message and gives people that sense of security. But it does feel that there's something else going on why people aren't talking about it, because it's the biggest benefit that BTR, single family housing, or the private rented sector, as it used to be known, which maybe is the answer that we need to all these terminology.

SPEAKER_01: 19:52

I completely agree. I think... there is this it's like renting is a dirty word and i i just don't i don't see it i do understand it to a certain extent and there is an aspiration around you know well why are you paying rent why don't you just get a mortgage and own your home but not everybody can that's very very obvious especially at certain different stages it's not right for everyone so we have to create the environment where renting isn't seen as a dirty word and where it's really clear as to what your options are if you are a a new family who are moving out of London and want to find their feet in a new place, or if you are a couple, or if you are a group of friends, or whatever it might be, I think that we need to do a better job of not just saying, right, just go out to the private rented market and see what you can find on Rightmove. I think there's more work that needs to be done with regards to demystifying some of the acronyms, with regards to branding as well. And there are a couple of brands there, but actually, I can't remember what they were. And I think that's quite telling in terms of customer facing brands that we just don't know who they are yet because it's such a fledgling industry, but we will. And I think that there's an opportunity for some serious institutional capital to back or create some significant single family housing brands to then operate those properties. There are some serious operational complexities compared to PBSA, but I think that creating those brands and that aspirational place to live... I think more often than not, you're probably focused on, I want to live in a certain place. I don't necessarily care about the amenities. It doesn't have to be effectively a managed village or a gated community or whatever it might be, because some of these properties are just isolated on their own. And the institutional investors have got portfolios across the UK. So I think there's a lot to run at there. It's been really eye-opening. I was really impressed with the event. I was impressed with the people that I saw at the event, and it's definitely going to go places. It's a case of who is going to be strongest on that messaging, on the branding, nailing their operations and having the long-term capital to really deliver affordable and effective communities.

SPEAKER_03: 22:07

So thank you BizNow for inviting Dan and I to the event this morning. They've got some other great events coming up, including a co-living and a build to rent conference, both coming up in spring, summer. So yeah, we recommend that you take a look at those and we hope to attend more of the BizNow events. We're going to take a break now and hear from our sponsor.

SPEAKER_00: 22:28

Season three of Housed, sponsored by mystudenthalls.com. Let's find your place.

SPEAKER_03: 22:36

Thank you very much to my student halls once again for supporting us. So we had a really interesting comment on LinkedIn a few days ago, which we have been busy researching and trying to get to the bottom of. So thank you, John Hammond from Zero Deposit for asking us the question. We haven't quite got to the bottom of it, but we will try and unpick it for you. And hopefully some of our listeners might be able to help us out. So John asked, does PBSA contribute to the Labour housing targets? So my first port of call was to speak with Sarah Shaw from Glasgow, who we've spoken to a number of times at various different events. And she said that they don't currently report PBSA as homes, but there is an argument to say that they add to the housing stock because students may choose to live there instead of the rest of the private house rented sector, which are homes. And she said it basically, as far as she knows, it's reported locally, but she doesn't believe that anyone in Scotland reports them as homes. I mean, you're really talking about Glasgow, Edinburgh, Dundee and Aberdeen and potentially St Andrews as well in Scotland, which have the PBSA. But she knows that, for example, Edinburgh doesn't report them as homes either. So we haven't found out yet if England does and if it's a council by council, if it's city by city thing, but it seems astounding that PBSA wouldn't be counted as a home towards the targets and really a quick win because you could be putting 500 beds, a thousand beds into your city and very, very quickly to come off those housing targets. So Dini, Dan, have you got any thoughts on that?

SPEAKER_04: 24:14

It's a great question. And it's crazy that we don't know the answer, which probably means it's not being done, which, as you say, is utterly crazy. And I think it comes back to the conversation we've had a few times is that actually this idea of segmentation and just because it's something else It's not classed as a home. It's like it's still a place that someone lives in. And actually, the more that we collect the data on the places that we live in, the more we have an understanding of what our housing stock is and what we need. So it seems a no brainer to me.

SPEAKER_01: 24:42

It's absolutely barking mad. Some of the the fact that that would not be considered is crazy. Because if you want a quick win, if you're the Labour government and you come in and you want a quick win, you take international students out of the net migration figures so that your immigration numbers come down and you'd be very open and upfront about why you're doing that because they're transient and they don't stay here. Or if they do, X percent actually stay here, which is marginal, by the way. We need to be calling that out rather than letting the Daily Mail front page and Nigel Farage run riot with the ambiguity that's caused by that. And then the next thing you do is include PBS say in the housing targets like it's it's crazy all of this needs to be completely recalibrated to include those numbers to make sure that every bed or room that is available students need to be housed however long they're there for they need to be housed and that is effectively their home i don't understand why you wouldn't be saying right yeah well that number of pbsa that we have across the country the 700 000 or whatever that's going to be included in the housing targets but we still need to get motoring and and push beyond and i think that's where They're probably saying, well, we haven't done that to date, so we can't really do that now because it will be seen as a bit of a fudge of the numbers because that's half the target of 1.5 million over the course of the parliament done. And I know it's not that simple either. You do need to build non-PPSA, of course, and that's part and parcel of why there is that lofty target. But I just don't understand why that wouldn't be included as part of the figures. Do you?

SPEAKER_03: 26:19

What I don't understand, and I think you probably hit the nail on the head, Dan, is the word home. Why is it not considered a home and why is it different to any other type of home? Is it because they're seen as not living in it long term, that it's temporary, that they're young people on the whole renting? I don't know, but that's really worrying and it probably goes a little bit towards understanding why in the first kind of reading of the Renters' Rights Bill that PBSA was so underrepresented and there was a lack of understanding because people don't really know what it is and it's not understood and it's not being described as homes. And the more PBSA there is, the more houses in cities that can be freed up for other people who aren't students. So yeah, it feels like a potential easy win. Like you said, Dan, I don't know if it'll happen because it could be seen as skewing the numbers, but so what? Like things have got to change and move on.

SPEAKER_04: 27:18

But does it also drive product development in a sense that if they're not classing as homes and they're saying, well, they're only for students, they're only for temporary occupancy because they're only there where they're studying, then they're going to go somewhere else and you're going to get a new batch of students coming. As we've seen, the biggest problem with that is that when student numbers drop, you end up with vacancies in those buildings that are perfectly decent homes for people to live in. But no one can live in them unless they're a student. So there we've got wasted space that could be being used, which if there was then that came with more leniency on actually regulations of who can live there. Actually, that means that PBSA or shared living or flex living developers start to make more flexible, homes that can be used for students in some respects and can be used for other renters in other scenarios, which actually means we're making use of our stock.

SPEAKER_01: 28:12

This goes back to the root and branch review of the planning regime that's needed. And you just look at Coventry, there's two PBSAs sitting bone idle at the moment. Literally, that's hundreds of beds, no students in it because they can't fill it and therefore they can't be bothered to operate it. And it doesn't make commercial sense for them to do that. The council are not letting them flip that use into either BTR or co-living or something else. They're saying, no, sorry, you've got PBSA license. You've got to fill it with students. That to me doesn't make any sense at all because there's, as I said, hundreds of beds there that could be counting towards the national housing target and they're not allowing them to move. So that needs sorting out completely as well. Like all of these figures, all of the targets are, everything that's included within them, and then the planning regime. If you can sort those out, that would be wonderful. So I think that's as far as we'll get on that for now, John.

SPEAKER_04: 29:07

I'd love to invite a planner onto the show, though, and just see it from the other side, because there must be another side, because there must be, because I'm an optimist, because none of it makes sense to us. So maybe any planner that wants to come and explain it to us, please do come and explain it to us, because none of it seems to have any logic.

SPEAKER_03: 29:23

Yeah, but what you were saying, Didi, makes complete sense. It's like, if you if you built pbsa and then the beds were empty and then they changed the use would that then be a home because it's not students or is it the way it's constructed that makes it not a home and not counted towards housing targets I don't know, like you said, let's see if somebody can help explain it to us. But it was a really good question, John. You've clearly influenced this conversation and something that we'd like to explore more. So please keep the questions coming in. We really, really appreciate it. It certainly made us engage our brains this afternoon. So yes, thank you for that. So coming up in the next couple of weeks, we are launching a new segment to the House podcast, which is called Ask the Expert. We want your questions on building safety, Renters Rights Bill and the Leasehold and Freehold Act for our experts, Howard Kennedy, to answer. Their large and experienced team advises occupiers, developers and investors in the real estate sector. So they're going to be joining us every week for six weeks for a five minute segment at the end of each episode where you can get your questions answered by the experts. I think Deanie, Dan and I are very happy to have some experts join us so that clearly we don't have the answers, so we're not even going to attempt to tackle those three topics but they are more than happy to so please make sure that you contact us via linkedin whatsapp or email with your questions and now we wrap up today's episode we'll say thank you to the e-word for being our headline sponsor for the season your support is hugely appreciated and of course thank you to our friends at my student boards for joining us as a sponsor once again please do subscribe and like and share housed so you get the brand new episode every friday and if you give us rating and a review that would be marvelous too thank you very much and see you again next week