It's no secret that the student accommodation market is booming. The University of Cambridge is currently in the early stages of its £1 billion North West Cambridge Development (expected to house up to 8,500 students); whilst the University of Sussex is undertaking more than £750 million worth of developments. Rental yields in this sector are currently averaging around 7%, almost 2% higher than the average private accommodation rental yield.
Now that the cap on student places at UK universities has been lifted, the demand for student homes is only going to grow further - this academic year, 30,000 extra places were made available to students, a figure that is expected to extend to 60,000. As a result, investment in student accommodation in 2015 is forecasted to rise to over £2 billion, and grow again in 2016.
Exeter in particular seems to be making the most of this opportunity - the number of student properties there has almost doubled in the past five years. According to figures obtained by The Echo, the number of dwellings in the city rose from 1,495 in October 2009 to 2975 in October 2014 - an incredible increase of 98.99%. Around three quarters of the increase was the result of new purpose-build accommodation, including the £16 million Printworks on Western Way with almost 500 apartments.
Christine Fraser, chairman of St David's Neighbourhood Partnership, described the 'domino-effect' happening in Exeter at the moment, 'whereby one property is sold to become a student dwelling and then others go the same way, because of the negative effect on property values.' Whilst it is undeniably profitable to have a large number of students in the city, many locals don't want to feel outnumbered by them.
There are currently 18,000 students in the city, but that figure will not stay static - especially if new developments are given the green light. Eagle Yard in Tudor Street, and Eagle House (both listed buildings) are awaiting approval to be turned into 21 studio flats - but the proposal has already been rejected several times by English Heritage, who argue that the plans 'made no attempt to incorporate the existing historic fabric of the site,' and that the development needs to blend more sympathetically with the history of the area.
There is also the issue of council tax - the council could be losing revenue normally raised through council tax on dwellings, because students are exempt from paying the charge. However, the authority admitted that it does receive some money from the government to compensate for the losses. Yet the fact that 4,100 families are currently waiting for a council or housing association home in Exeter suggests a balance needs to be struck between investing in homes for students and investing in homes for residents.
A Students' Guild spokesperson said: "Student residents in Exeter are invaluable to the community, not only in terms of revenue, but in the tens of thousands of volunteer hours they contribute to projects which support local charities, schools, community centres and residential groups.' They said that 'we are very proud of our strong and growing relationship with our community neighbours' - but time will tell if it is too much too soon.