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
Are We Heading for a Housing Oversupply? Comparing Glastonbury to Shared Living Why are Affordable Rooms only for University Nominations?
The Housed Podcast team examines sustainability in shared living by comparing Glastonbury Festival's impressive renewable energy achievements with the current state of PBSA and BTR sectors, questioning why purpose-built accommodation struggles with basic green initiatives.
• Many PBSA and BTR operators pay lip service to sustainability without implementing meaningful changes
• Inclusive versus non-inclusive rent models create tension between convenience and sustainability goals
• Dr. Yolanda Barnes suggests there may soon be a surplus of second-hand homes in the UK
• London's affordable student accommodation policy channels affordable rooms through university nomination agreements
• Developers claim affordable student accommodation is impossible to build with current return expectations
• The team challenges whether traditional development models are preventing truly affordable and sustainable options
• Industry professionals facing redundancy are encouraged to reach out to the podcast hosts for support
Send your questions for the final episode of the season to hello@housepodcast.com
Thank you to our season four sponsors:
MyStudentHalls - Find your ideal student accommodation across the UK.
Utopi - The smart building platform helping real estate owners protect the value of their assets.
Washstation - Leading provider of laundry solutions for Communal and Campus living throughout the UK and Ireland.
Hello everyone and welcome back to Housed, the shared living podcast. This is the 10th episode in season four and we're so grateful to have you with us every week as we update you with the latest news, views and opinions from the world of shared living. I'm Daini Lee from the Property Marketing Strategists.
Speaker 2:I'm Dan Smith from Resi Consultancy.
Speaker 3:And I'm Sarah Canning from the Property Marketing Strategists.
Speaker 1:And first, a word from our headline sponsor. Season four of Housed is sponsored by mystudenthallscom. List your properties, commission free and reach thousands of students searching for their university home. Dan and the team from my Student Halls have been supporters of Housed since the very beginning and we love working with him and the team as a sponsor for the podcast, but also supporting our clients with their student accommodation listings. Make sure you get in touch with Dan and the team if you haven't done so already, and I also hugely thank you to our sponsors, wash Station and Utopia, and we'll hear more from them later.
Speaker 1:We only have a few weeks left of this season and, as has become tradition, we are handing over the last episode over to you, our listeners. Please send us all the questions and we will do our best to answer them. You can email WhatsApp, voice note video, whatever it works for you. Please send them to us Also. Hello at housepodcastcom is the email address. So let's get some really juicy topics to finish this season with. So first, what have we all been up to this week? I know I've had a big weekend, you go first.
Speaker 3:Dina. Yours is more impressive than ours, I'm sure.
Speaker 1:So, yes, I have literally only yesterday come back from Glastonbury Festival, so I'm a little bit tired, a little bit croaky, but I am here and I know I was thinking all weekend Well, I was thinking all weekend about shared living, but I was aware that I had to record a podcast, as I think the 26th or 27th biggest urban area in the country and it's all fully powered by renewable sources, which I think is pretty impressive and shows you what you can achieve really if you put your mind to it. You know, and when you step back to the festival and you see this valley of light, it's not like they're scrimping on energy, but they're creating all their own. And in terms of that ethos of sustainability and making it sustainable is all the food operators there have to have compostable packaging, so everything that comes through is packaging and they have on site a fully functioning. I think it's the biggest private recycling center in the country and it's hand sorted so that all that recycling gets into the right places and the right things.
Speaker 1:My biggest upset is the rubbish is still really bad and I don't understand why people drop rubbish and that really really upsets. You know, we were a family of four there for the weekend and we didn't drop one piece of litter. You know we, you know, with two kids, we picked everything up and put in the bin. It's not that difficult, so that's really upsetting, but obviously the teams that go through and sweep it is is massively impressive. And I guess the other thing is just that it is a commercial operation. Obviously they're there to make money, but they haven't forgotten who they are.
Speaker 1:I was last there 25 years ago and I've gone back and taken my family there and it is a very different festival in terms of it's doubled in size and it had to get more commercial because it had to pay for more security and it had to get more organized to enable to keep their license going. But whilst it is still commercial, it's still got its heart about who it is and and who it wants, and it delivers value. It's expensive but it still delivers value, and I just think that's something that all businesses can take forward and deliver. And that's the most important thing is, actually, do your customers go away thinking I just had an amazing experience or think I I've had a good experience but it was really expensive? When you come away from glasgow festival, you just think about the experience you had and those 200 000 people that were on site this weekend.
Speaker 2:They would all come back having an amazing experience I think it's amazing in terms of the sustainability credentials of it. I would expect it, you know, from a traditionally sort of left-wing hippie type festival to be really focused on on that sustainability piece. But it just gets me thinking why aren't we doing more in pbsa and btr, and that this has been my frustration for a while. I think there's a lot of lip service paid to esg and sustainability in particular, but there should be no excuse for sending any waste to landfill. There's just no reason for it in this day and age, and you can recycle end-of-year products as well. We've seen a lot of that go to charity these days. So every building needs to be better. Every operator, I think, therefore needs to be better. We're sort of meeting some of these standards, but we're not going above and beyond. I'm yet to see an operator that I'm truly really impressed with and that's difficult for me to say because we've got clients in the sector but it just is such a gap and such a missed opportunity and somewhere like Glastonbury, where you've come away from that as one of your key thoughts, thinking about the sustainability. Obviously you had a brilliant time, watched a load of great people on stage, but I think that is definitely an opportunity that we're still not grasping with both hands, and it's not just about, well, I'm very good.
Speaker 2:I think we need to be looking way beyond that now, and I'd love students to be voting with their feet and going to the most sustainable buildings. Maybe we need to get better at that certification. We've already spoken about that Well, right back when we first started the podcast, I think but these should be now front and center so that students are really well aware of who they're booking with and does that brand align with their values? And I think you know showcasing whether you're not net zero operational carbon, whether it's low embodied carbon construction, whether it's, as I said, zero waste landfill, all electric building energy efficiency measures. There's so much that can be done. It just frustrates me still that we're having these conversations and some operators are barely paying lip service to it. I think there's a lot more work that needs to be done in the sector.
Speaker 3:While Dini was at one end of the country, I was in the other end of the country, in the district, and to be honest, it was really really visible all of the environmentally positive features that a lot of accommodation uses in the Lake District. There were solar panels everywhere, which blew my mind, because it's not really that sunny there, but they make it work everywhere which blew my mind because it's not really that sunny there, but they make it work. But also it's using natural resources. You know we walk past some amazing holiday homes, sort of Airbnbs, and outside their buildings it said that you know we, you know we're using renewable energy. They're using, you know, energy from the streams that pass through. You know the gardens and they've got the solar panels. You know there waste etc. Etc. You know and this is you know some of the places we went to were really really remote, you know. So if we're saying that they could do it in the Lake District and Deanie's saying they can do it in a field in Somerset, then I'm pretty sure that they could do it in a city fairly easily.
Speaker 3:I mean, we've talked before about the marketing side of things. You have to tell people about it and I think the things that are covered in kind of the the bream credentials are less interesting maybe to consumers. Completely brilliant from a construction development point of view, but it's the more visible things that the consumers care about and can see, you know. And then that becomes. You know what a lot of our you know, our conversations have been about is kind of the nudge theory. It's behavioural change. You know. People can't contribute to how a building is run when it's already built if all that's being focused on is how it was constructed. We need ways that they can see and feel and hear and touch. You know, moving forward from an operational point of view, I think that's why I've come away with it.
Speaker 1:Anything is possible if people put their mind to it. And if that becomes, if it's part of your business, it's part of who you are and it's part of who your brand is, then you've got to live and breathe that and you've got to make changes and you can't just put it in the too hard button. And I think far too often we put it in the too hard button and we shouldn't put it in the too hard button because it's too important not to. So yeah, you should all go to Glastonbury Festival see how it's done and then go away and you can build your properties bigger and better.
Speaker 1:I imagine I think that conversation does link slightly with our watch station sponsor from John Stott, and Narden has rightly asked are we tying ourselves up, not trying regarding inclusive and non-inclusive rents? On one hand, we're saying laundry should be included and on the other hand, we're saying that it should not be included to make people more accountable for any energy uses in PSA and co-living, which I kind of I hadn't really thought about it, because I'm really pro laundry being included and I'm kind of kind of becoming more pro that actually we should strip out bills. So thank you, john, for the question, because you're absolutely right, but what?
Speaker 3:do you guys think when he sent that question in, I was like oh yeah, you know we want it all, don't we? You know, and that's the point I think where I am is, I would love it when operators say it's all inclusive. It's all inclusive and that includes laundry. And I can't remember which operator it was that was speaking to. It might have been at a conference and they said that they make so little money from laundry that actually it's so much easier just to include it. You know the goodwill that it shows. You know the lack of admin, the nod towards affordability. They said it's so much more worth including it than actually not including it. So I think if everything's included, make everything included, because it sounds like it's a no brainer really.
Speaker 3:But it's hard, regarding particularly the other kind of I guess, the energy side of things, to make people accountable. If it's all included, I'm not sure if you include laundry, if people really take them in. I mean, we have heard some stories like. We were speaking to a university a while ago who said that they suspected people's friends were being allowed on campus with their laundry to do their washing on a campus. That's free, you know, and maybe if it's free. Some students are like oh my god, I need this top for tonight. I'm going to quickly wash it, but I'm not sure that it's the washing machine side of things that is particularly using all the energy. I think there are other ways to make people more accountable for their energy usage. I don't know, that wasn't really very clear. Like I said, uh, yeah, I think we, we want, we want it to be a win-win situation I agree we do want it all.
Speaker 2:We want to show maximum affordability, but we want the most efficiency and sustainability and and I think this will come down to segmentation I I think there will be a focus on some operators to just strip out all costs and I think they will potentially, on the affordable end, strip out utilities, strip out laundry and just have everything as an added extra. You want laundry?
Speaker 2:fine, pay for it, like you know, and it's going to cost you x amount. You've got to be clear on that. Yeah, the worry with that is the energy poverty side of thing and the laundry poverty which we know is a real thing from our conversations with John at Wash Station and from others as well, and also from talking to the likes of Tim at Amber about energy poverty being a real thing. So by opening up the more affordable sector and doing that that does you know and stripping out the laundry and anything else that you might have to pay extra for, that does worry me slightly that you end up with a two-tier system, even though it may be potentially more accessible. I just think if you say that it's all inclusive living, you have to include your laundry and then you kind of rely on the laundry providers, the likes of Wash Station, smart, green, clean. That's really stuck with me, really, that's really stuck with me. But I I genuinely think that it's on them to also be showcasing why they have the most sustainable machines and potentially limiting the temperature etc and making sure that that's all as sustainable as it possibly can be and then communicating that, like showing how do you wash more sustainably, making sure that you can do larger loads and, you know, with less water usage, less energy usage, I think that's absolutely key. So a lot of this does come down again to that communication piece that I just don't think we're particularly good.
Speaker 2:Once we get students there, or residents, even in btr, I think, once they're in in situ and they've booked, I don't think there's much of a this is how you live sustainably or this is just how you live in general, and I know that we don't want to be dictating that and it's not nanny state.
Speaker 2:We don't want pbsa stepping and telling people how to live their lives too much. But there is absolutely no harm in in this uh, in nudging in particular, and it's still not done well enough. So, you know, I'd love to be going in in a few years time. I'd love to be going around properties with really clear signage, really clear instructions on usage metrics and targets and data and dashboards showing energy usage, water usage for laundry in particular, but also for other areas as well. I just think give them all the data they can or that they possibly need to make more sustainable lifestyle choices. I think that's, that's half the battle. But yeah, it was a really interesting point from John that you sent through this morning. But yeah, it was a really interesting point from John that you sent through this morning. I do wonder about that affordability piece and whether you would then end up with, as I said, laundry poverty and energy poverty.
Speaker 1:Yeah, and my mind was going there's an effort to laundry in the sense that you have to go and pick your clothes up, put it in the machine, wait for it and do it, whereas switching the heating on or leaving the lights on is not so much effort. So in that sense to me it's slightly different and I guess we're coming from a viewpoint that actually when they're in their homes with their parents, they've got a washing machine in their kitchen or wherever there is to just do their washing, so it becomes a convenience. So I guess there's that's what's playing in my mind is that if you want to give people a home, you want to make it as easy for them to live. But I think there's lots of different ways you can pack up laundry, but it doesn't. It can still be part of a paid thing, but it's just making it easy to say, as part of your laundry, as part of your rent, you get x amount number of laundries and I guess if there's ways that people can have the data to say, actually you know it's going to be, you know if you've got solar, solar panels, if this is the best time to go and wash, or this is the greenest time, or whatever there is. I don't know, but it just feels like to me. It's not as easy as just switching a light on or turning the heating on because you're a bit cold, because you do actually have to go and think about something and do some effort.
Speaker 1:So, yes, dan, you're absolutely right. That was brilliant conversation from john and it's certainly got my brain working this morning, so thank you very much. Before we move on, we'll just have a quick break to hear from one of our sponsors. Wash station proudly sponsor this episode of housed. We provide best-in-class laundry solutions that complement your buildings. Wash station smart, green, clean. Sarah, what I also want to speak to you about was you at the opry festival last week. How did that go?
Speaker 3:yeah, I, I was it's. I think I've been a few years in a row now and it's a really great festival. I was one of the advisors and I really love it when organisers of conferences ask people that have attended what they think of it. They've been very, very honest in those sessions. Things they want to improve on, what can they work harder on. So I feel like each year it gets better and better. It always strikes a debate what is operational real estate? And I think, as the years go on, nearly every sector of real estate is now operational real estate. And I think, as the years go on, nearly every sector of real estate is now operational real estate. So the conference does actually cover lots of different types of real estate, which I think is really really important that sectors don't just stay in their lane, that they learn from others as well. There's quite a big hospitality crowd there, quite a lot on the agenda about hospitality, which is always really interesting to hear about. So one thing that I wanted to discuss today was hypermixity.
Speaker 3:We've talked about the insight from Dr Yolanda Barnes before, but I've not actually seen her kind of go into as much detail as she did in this. She talks about kind of the history of dwellings and how people live, which was super interesting because I'm a massive history geek. But the controversial bit of this is that she actually finished by saying she thinks there is going to be a surplus of second-hand homes from as early as next year. She says she doesn't know why the government are focusing on building new homes, because she thinks there are enough homes already. And actually, if we're creating so many new homes and people are being incentivised to move to the new homes and people are incentivised to build new homes, what's going to happen to all the secondhand homes that are out there?
Speaker 3:I don't know if she was alluding to kind of what we discussed even last week about later living and older people, you know, not freeing up their homes for other people, and that perhaps families are going to shy away from buying secondhand homes. She did talk about, particularly with apartment living, that they can depreciate in value, that they're expensive to run unless you've got a good management company can depreciate quite quickly. There can be a lot of maintenance involved in it. So maybe people don't want that, those kind of homes moving forward. Maybe people want to live in new build homes without all that hassle, um, so yeah, so I found that really interesting.
Speaker 1:Dina, you're looking really confused well, I'm not confused, I just find it fascinating because I'm. Just. Well, I guess what I'm confused by is a second-hand home, because every home I've lived in is a second-hand home. So I've never thought of it being a bad thing that something is second-hand and in terms of value, you know, when I lived in London it's obviously all the Victorian houses that had the higher value and they're, you know, second-hand by many, many hands. So I just find that term fascinating and kind of whether that relates to that.
Speaker 1:If people are moving into what I guess would class as a new build that they'd only want to move into, a new build that's new, not a new build that's five, ten years old, and is that something about construction? Are they holding up that construction, I guess, compared to our Victorian counterparts who are holding up and are adding that value? So I guess that's where my head was going and it sounds. It's a fascinating conversation and I, you know, I'd love to kind of read more of her research and understanding because, yeah, and do we want a market where we, you know, second hand home shouldn't be a bad thing, you know, ultimately, and we just want to make sure that they remain attractive. But yeah, if we've got enough homes, then yeah, we shouldn't be building. But it comes down to this argument are they the right homes for the right people for the right needs?
Speaker 2:I absolutely love the fact that you can put yolanda barnes on stage and have her say I'm not sure we need to be building all these new properties in front of a load of developers and investors and operators of said buildings. But, to be fair, I think that speaks to Sarah and Andrew Sangster's integrity in the way that they love to challenge and they love to question entire sectors and real estate as a whole. It is a really interesting one. Now. We're currently primarily adding people to the population by net migration. There's about half a million people a year being added, but the the natural natural growth is minimal or negative at the moment. So the births, or births minus the deaths, that's pretty static. So it is in net migration.
Speaker 2:Now, if the government is cracking down on net migration, trying to get to that goal of 100,000, then that does reduce the need for housing and it seems we're building a lot of high rise apartment living complexes and that may not be what everybody wants long term. It may be that that's a transitional phase. It may be that we move a. Do we actually need all these buildings? Have we not got enough? Could we? You know, with migration being reduced as it currently were, I mean the target is to reduce it. They're not actually making much progress on that. Do we really need all these new buildings and therefore do we need a house podcast and do we need to be consultants? I mean mean, it's obviously quite an extreme argument. I would say that it's more about the modernization and the moving up through the housing system, as it were.
Speaker 3:But yeah, absolutely fascinating from dr yolanda barnes there is it about maintenance, and you know regulations, you know, for you know, I I'm I'm sat here in my victorian semi at the moment. You know it costs money. We've replaced all the windows, you know. Does it have a great EPC rating? No, it doesn't, and you know we're fine with living in it and we've got no intention to move. But obviously, as we've discussed before, if we were going to be renting this out, we would have to do a lot of work to get it up to EPC standards. Do people want big gardens? Do people want to spend their time maintaining properties? I mean, that's what the argument for single family living is all about in the VTR sector is. You know, people probably quite want to live in nice, well managed, rented properties, because they don't have to worry about all of those things that you have to do when you buy a property. I't know it. Like you said, it was provocative. There's lots of different ways that you can. You can cut it and it's. It's really interesting.
Speaker 3:And you know her predictions were in the very, very near future, you know. So we'll, we'll find out. I mean, maybe it's already happening, because if there were, if there wasn't enough houses for everyone, then there wouldn't be any houses for sale with that. They would just all be occupied. And they're not, so you know. But there's lots of people that are homeless and there's lots of people that are in insufficient social housing. So there isn't enough, like you said, teeny, of the right housing for the right people at the right price, and just by building more and more new builds is that helping?
Speaker 2:Yeah, and obviously you have your families, people who are having kids and needing to trade up, so there'll always be that movement, but we don't have a coordinated national housing strategy as to exactly what's needed. Yes, we've got a few policies, but ultimately that needs full integration with the private sector and it does need planning regime change, uh, from from top to bottom, because I think you could get the, you could get housing moving very quickly if you just reformed planning. And, yes, there'd be certain incentives that would be needed as well for certain types of developments. But yeah, ultimately what we want to do is make sure that we have affordable housing, and I don't just mean that you know that you have that at the lower end of the affordable sector. So that's social housing or, uh, you know the sort of first housing that is affordable.
Speaker 2:I mean, at every stage of life you need affordable housing and I think that's what we're pretty bad at and that's completely out of control. So again, it comes back down to the cyclical nature. If you build more, then the price drops. It's really that simple. So if the government are trying to make housing and either owning or renting a house or flat or whatever it might be more affordable, then the simple, long-term solution is to just build more of it, but then you need to make sure that you're building the right stock as well I guess what my mind boggles is that surely it's it should be an easy sum of working out whether we need more housing or not.
Speaker 1:So why? Why is there so many different opinions on this? And I guess that comes down to what those homes are used for, what's required, what the ultimate aim is and I guess you know there's a lot about a lot of people that I guess you know trying to protect. Because, like you say, dan, house prices drop. That affects everyone. No one really wants that, but everyone wants affordable homes and it's a real thing that we've all got to understand. Actually, to get affordable homes, we've all got to lose equity, and that is just how it is. And I guess that makes it very difficult for governments to just quickly go and do this, which maybe is why it is. But yeah, it just makes my mind's boggle that we can't just do do the maths of how many people are here, how many people need homes, what have we got? What? What's the gap?
Speaker 3:I just wanted just on the Opry Festival, just wanted to just talk for a moment about the panel that I moderated. I had a dream panel. It was Paddy Allen, jane Crouch, seb Horst, brian Welsh and Richard Ward and we we got together a few weeks before the session and decided that we wanted to shake it up a little bit and get some audience participation. We kind of had the mid-afternoon kind of graveyard slot and we wanted to make sure that everybody was paying attention and not just sat there on their phones. So we split our session into four categories, asked the audience to vote on whether it indicated a positive or negative indication of investment into the PBSA sector. So the first topic that we talked about was politics, geopolitics and the economy. We covered student mobility, finances, cost of living, what other countries are doing, and then we asked does it sound positive or negative? And the audience voted that they think it's a positive outcome that all of those policies. We then talked about AI and again the audience said that it's a great opportunity for PBSA as well. So that's good news for you, dan. Renters' rights bill this one got a thumbs down. Said that it's a great opportunity for pbsa as well. So that's good news for you, dan renters rights bill. This one got a thumbs down.
Speaker 3:There is some nervousness about how it will impact, and jane kind of took the lead on this question and was very, very keen to emphasize we don't know anything for certain yet. You know, stop assuming that pbsa is exempt and all of the reasons why it's exempt. But also, fundamentally, exactly what we've been talking about is it's still going to impact the whole sector, and the audience seemed to agree with that. And then the fourth topic was about affordability, which obviously we'd skirted in the other topics as well. But the question at the end was kind of do you still think that it's? Bearing in mind everything that's been talked about? Do you think pbsa is a positive sector to invest in?
Speaker 3:and the overwhelming audience said yes there was one person that had their hand like half up, half down, not sure where he was going with that, but the rest of the audience said that it still sounds like a positive investment, so that was really interesting. We had such a short amount of time we did like six, seven minutes on each of those topics because we only had a half an hour session but it seemed to kind of inspire people and get people talking. So, yeah, we really really enjoyed that one and, yeah, thank you, andrew and Sarah, for inviting me to be part of it once again that is a powerhouse panel there, and Brian Welsh as well.
Speaker 2:I think there's a lot to be said about how the audience has seen that and how it's been portrayed, because it wasn't like that was just agents on the stage there. Yes, some of them have an interest to talk up the sector. We've seen Stu Rents be, I think, a voice of reason, if I'm being honest, in a lot of the hubris that we've seen about the sector. I know that it's been a bit of a rocky ride up until the last month, I would say, in terms of the sales velocities, a lot of concern, a lot of worry about the later market. It does sound like a better month this last month. Overall, though, looking at each of those factors, yes, pbsa is still a very positive place to put your money.
Speaker 2:I think you just have to be so careful about the micro location. This is what we're working on now. You can't just say, oh, yeah, throw it all into PBSA, because you could be buying those assets that are for sale in those ropey locations in those cities which are really struggling, which are really struggling. I'm not going to name them. You all know who I'm talking about, which cities I'm talking about and also which properties and portfolios I'm talking about as well, but you have to get so focused on the micro location. So was there much of a talk about that that it wasn't just generic? Yeah, pbsa is amazing, and actually it's got to be much more targeted now. You cannot just afford to lump your money into PBSA and expect it to all be all right.
Speaker 3:Well, that was a discuss but interestingly, in the battle of the brokers session it was a vote between PBSA, btr and hotels and actually hotels was voted out of the three, the better investment opportunity than PBSA or B btr. So again, that was really interesting and you know exactly why conferences like this should exist, you know, to really kind of open your eyes as to you know what what else is going going on in the real estate sector this is.
Speaker 2:This is the moment where it's because I tell you it's because I wasn't pitching it. I had to pitch pbsa as a sector at opry two years ago now, I think, and it won. It was voted the most likely place that people would put their money based on, and you know it started off and it was hotels and apart hotels and then after the pitch it ended up being PBSA. That's certainly not me blowing my trumpet. It's just how things were two years ago. In particular, we were in the post COVID boom then and things are very different now. I still would.
Speaker 2:Obviously, if COVID happens again, what happens to hospitality? And that was my argument first time around. I was like, how did you guys do in COVID? Looking at all the people on the panel from apart hotels and hotels and they all looked ashen. At that point I was like, yeah, I'm pretty sure PBSA's got this, and that's not me saying I'm expecting a another global pandemic, but I'd be interested to to have seen that it's a. I was in paris on a tender process unfortunately, so couldn't make it, but uh, I'd love to have seen that.
Speaker 1:Hopefully I'll try and get some recording of it from andrew or sarah thanks for the update, sarah, and I know that when I went last year, what I think is great about and we've said this before is going to those kinds of conferences where you are mixing with other sectors is really useful and really great to get outside of that PBSA zone or that co-living zone and actually just see what everyone in the broader kind of sector is doing. So thank you for that update. We are going to have a quick chat about London, but we're going to have a quick word from our sponsor first. This episode is brought to you by Utopia, the smart building platform that helps real estate owners protect the value of their assets.
Speaker 2:From ESG compliance to energy efficiency and resident engagement. Utopia turns real time data into action, making buildings better for people, planet and profit.
Speaker 3:If you're in asset management or operations and care about performance, utopia is your essential partner. Find out more at utopiacouk.
Speaker 1:That's utopiacouk, so just to finish on today we just wanted to talk about is it fair that affordable student accommodation means nominating rooms for university in London as part of the kind of London affordability plan? Is there another way for this to happen? Is that the best way to get those affordable rooms to the right students?
Speaker 3:This is probably another one of those topics that we are tying ourselves up in knots, and we want it all, because I think I'm probably going to talk on behalf of the three of us that of course, we want affordable accommodation in whatever way, shape or form it comes, and in London, all new developments have to have an element of affordability, but they also have to have the backing of the university in order to get permission to build in the first place. Therefore, those affordable rooms go to a university nominations deal, which is is fantastic for the university. It's such a great way to appeal to their students. They're getting really good quality accommodation and they're getting it at an affordable price Brilliant. What's not to like about that? However, they're not available on the open market, so presumably they form part of the rent guarantee, mainly for first years, maybe for international students. Maybe there's an element of post-grads there.
Speaker 3:But, when a student moves out of those affordable rooms, they're still going to struggle to find that second and third year accommodation anywhere near those kind of rents. Now I think we've discussed before with PBSA operators and the reason that they find it so difficult to allocate affordable rooms is how do they judge who needs an affordable room? Arguably, a university is much better placed for that because of the information that is disclosed through their UCAS application, for example. You know, to identify maybe students who have been on free school meals, who are from lower income families. You know PBSA operators are less able, less inclined to make those judgments and ask those questions, so it's always going to be harder for them.
Speaker 3:And if you just put cheap rooms on the market, then anybody could have them it wouldn't necessarily be the people that need them, whereas universities can. So yeah, again, I'm conflicted. I think it's great that London has this policy. I think it's brilliant that universities are backing PBSA developers. I think it's absolutely brilliant that there are available rooms that are affordable and universities are able to allocate them to the right people. But it still feels like it's not really fair that there is more affordable rooms on the open market for other students.
Speaker 2:Universities cannot build their own stock. This is one of the key issues that you've got at the moment. So there has to be some kind of private sector involvement in some way, shape or form. Now the affordability criteria is a bit much. It does strangle a lot of developments. I've seen a lot fall overondon because they just can't make the affordability criteria stack up.
Speaker 2:And so, yeah, I mean, the more that we can see, the more that we can see universities working hand in glove with the private sector to offer out those affordable rooms, the better in in my view. Because, as you said, sarah, pbsa is not qualified to apportion those affordable rooms. Universities are. There's means, testings, grants, maintenance, loans, et cetera. They have much more data on it. They can understand exactly what the situation is of that student, much less so for PBSA in the private sector. So that's one thing I just can't help. Going back to the fact that you build more, your rents drop, everything gets a lot cheaper. It does end up becoming that simple and I do think the you know, whilst we need more affordable stock, that is the long term plan and I suppose this is more of a short and medium term arrangement that it is a short term fix, I think, but it's one that I think could work. I'm the same as you, sarah, I just think it's.
Speaker 1:I'm conflicted with it, unfortunately yeah, I mean, I guess mark where my head's going is. That is it. It's a great policy and it's a policy that we need to get those affordable homes, but is it driving the right outcomes? Are we actually building rooms or buildings that are actually more affordable? Or are we just building a building that we always build and then segmenting off some of those rooms that we need to segment off and giving them to universities? But they're the same rooms that we're selling at a higher rate to other students and it kind of feels that actually, what we do need to do is look at how we can build something that is affordable in a sustainable way, in the sense that it can maintain affordable end of the market, not just a room that's offered out at a lower price, because that's part of what the policy is forcing us to do we just can't like.
Speaker 2:We just cannot build affordable and and I heard I've been you, I've been using the example that you cannot build anything for less than what you'd have to charge 240 pounds a week for. I spoke to someone the other day. They were like now you're way off, it's about 279. So 279 a week is what you would have to charge to build anything pretty much anything these days, unless you get the land for an absolute steal. But there are really no locations, even in sheffield and coventry, which are absolutely dirt cheap, I think, because those legacy landowners think that pbsa is is absolutely coining it in. There needs to be some serious work done to investigate and personally I think this should sit with the government. I'd like to see it sit with the british property federation as well, bpf to actually really investigate. Like, how can you actually build affordable? What does it look like to go from the ground up for a 100-bed property, for a 500 and 800-bed property, a tower or a sprawling campus, whatever it might be? I just don't think it can be done right now. I don't think you could, because affordable for me in student is anything under 150 quid a week. That feels affordable and that's where you see Sheffield and Coventry, and certainly parts of Leeds, nottingham, et cetera, becoming more affordable, much closer to that 150 mark. But I think it's just so difficult to build affordable stock and that's why we just don't see spades in the ground.
Speaker 2:There's a lot of movement at the moment. I think there's about 3 billion quids worth of PBSA on the block at the moment. But it's all just movement between investors. It's not brand new developments and I think that's one of the issues that we've got. They know that it's just not affordable. And when the Chinese in particular are more price sensitive and the postgraduate numbers look a bit shaky, premium is not necessarily an option either. So it takes me back to the Opry. Would you vote for PBSA? Well, yes, pbsa is a great sector, but would I build PBSA right now? No, I absolutely wouldn't. Not in the UK, not in the current climate, unless I found the absolute gold micro location. But even then, am I going to have to charge 279? Yeah, so you can do it at certain sectors and that's why the premium sectors have still been pretty resilient. But affordable and mid-range not so much.
Speaker 3:So I've got a really, really convoluted analogy. So my cousin has had his house on the sale for years and he's living with his ex-wife, so it's a really, really difficult situation. Neither of them want to be living there and in inverted commas they can't sell their house. Now, it's a really nice house in a really great location, but they're asking a lot of money for it because in inverted commas they both need a certain amount of money in order to move. Now I just feel like they have high expectations of what they need in order to move to their next property.
Speaker 3:Of course, there is a price for everything. They could sell their house at a lower rate and they could both buy one bedroom flats. Now that's not achievable because they've got a child that will be living between two houses, you know. But they could move areas, they could reduce the size of the house that they want, they could have less square footage, they could have no garden. You know there's all of these things that they could compromise on, but they're not. So in their mind. They can't sell their house because they can't get what they want from it.
Speaker 3:Meanwhile, you know, at some point something's going to have to shift and they're going to have to do it anyway. And that's kind of how I feel with PBSA is you can't build what you've always built for less. We know that, it's obvious. But surely you can build something different, something smaller, as in less beds, a conversion, non-ensuite, shared bedrooms, you know, less communal space, less operational costs, et cetera, et cetera. We're not going to go there now because this is a topic that we obviously talk about over and over again, but I still don't believe it can't be done, and many people at Opry told me again it can't be done, and I still don't believe them.
Speaker 1:I was gonna leave it because you said that, sarah, I think I was going back to my Glastonbury. Analogy is that when and I think it's because it's still a family-run organization is that, yes, they're making money and they're making a lot of money, and I'm not doubting they're not making a lot of money, but they're also investing a lot of money into the local community. So they said you know, I live near the local area and five million that's spent sending to Wales to build a skate park. But they could make so much more money if they wanted to. You know, for example, they've got a whole kids filled area and in that kids filled area you can go and get face painting, you can get hair braiding, you can get activities all for free. They could probably charge for that and make more money, but they don't.
Speaker 1:And I guess until we get that transparency on what that actually means, when you say it can't be done, I'm a bit like sarah. Is that? Have we really looked at everything? Have we really looked at all the different aspects of business possible? Can this be done? And I understand we live in a corporate commercial environment. People have got to make money and investors got to make money. But are we constantly trying to just compare what went before to what the future's got to be? And maybe the future can't be the same as it has been in the past, because we're in a different world with different challenges and different things going on.
Speaker 2:So it cannot be done with the current return profiles that investors have. That is the main thing there we go.
Speaker 1:I'm sure that well, we'd love to hear your feedback on that and I'm sure we'll come back to this topic time and time and time again.
Speaker 2:We finish off. Dini, I know you're just about to close out. There's been some news. Well, there hasn't really been some news actually, to be honest with you. It's just been some conversations that we've had with various different people at different operators. It sounds like there are a few operators that are either making redundancies or there have been some significant changes in fortunes, shall we say. So I just wanted to say on behalf of all of us, because I know that we're all happy to speak to anyone.
Speaker 2:If anybody is facing redundancy or is looking for something new or is in a different situation than they really expected to be, do reach out to us. It's definitely an opportunity for PBSA, btr, coliving to really rally around our own when things like this happen. I'm not going to announce exactly what's happened or or sort of indulge in the, the gossip, as it were, but you know, I know what's happening as to sarah and dini. So anyone is welcome to reach out to us on linkedin or or, you know, find us in other channels just to kind of discuss your options. Really, that's hopefully not inviting hundreds and hundreds of calls, but we are all ears. Some of us have been in similar situations, but I think it's really important that we can rally around our own. So, yeah, thinking of anyone in a bit of a tough spot at the moment after this week's news, and, yeah, do reach out if you need to.
Speaker 1:Absolutely, dan. I think we are a welcoming community and if anyone needs help then we are all here to support and help. All right, we will close now. So thank you to my student halls for being our headline sponsor for the season. Your support is hugely appreciated. And, of course, thank you to utopia and was station for coming on board for season four.
Speaker 1:We're grateful for your support if you work in the pbsa, btr, co-living, later living hmo and university accommodation sectors and enjoy our weekly podcast. Please do give it a rating and a review on your podcast channel of choice and also don't forget to send in those questions for our last episode and I'm sure my brain will be back into action next week when we speak. But thank you once again for listening.