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
Student Accommodation Podcast Summit
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Housed: The Shared Living Podcast hosts Sarah Canning , Dan, and Deenie recently collaborated with experts Laura Bosworth, Richard Stott, Jenny Shaw, and Rebecca O'Hare to record a special episode discussing crucial issues in student accommodation.
This top team of professionals share expert views on key topics, including:
⚪ PBSA vs. HMOs: Is affordability in student accommodation a self-perpetuating issue created by PBSA?
⚪ The evolution of PBSA rooms: Have they truly evolved to meet student needs?
⚪ Mental health challenges: Is the sector prepared for upcoming issues?
⚪ Understanding changing demographics and adapting services and products accordingly
⚪ Staffing costs and rent: Should increasing staff costs impact rent?
⚪ Undervaluing PBSA: Why are we still focused on rooms rather than the whole package?
⚪ Data, research, and market gaps: How data can reveal opportunities
⚪ Technology's influence on the future of accommodation
⚪ Future demand for flexibility from students
⚪ Intersectionality and inclusion: Implications for future accommodation options
Laura Bosworth is Founder and CEO of REAL listen to Get REAL about Marketing podcast here
Jenny Shaw is HE External Engagement Director at Unite Students listen to the Unite Group Accommodation Matters Podcast here
Rebecca O'Hare is Interim Deputy Director of Residential Services at University of Leeds.
Richard Stott is Managing Director of Kexgill Group.
Each week, Sarah Canning, Deenie Lee of The Property Marketing Strategists and Daniel Smith of Student Housing Consultancy will be delving into a wide variety of subjects and asking the questions that aren't often asked. This podcast is for anyone who works in Student Accommodation, BTR, Co-living, Operational Real Estate or Shared Living.
Disclaimer: The views and opinions expressed in this podcast are the personal views of the individual hosts.
Hello and welcome to this very special episode of House the Shared Living Podcast, the summer sessions. It's just Sarah here, and I'm just popping up to introduce you to this very special episode, the Student Accommodation Podcast Summit, where Dan, Deanie, and I, along with some absolute powerhouses of the student accommodation industry, got together to have a really in-depth, interesting discussion about the student accommodation sector. So without further ado, enjoy the chat. Hello and welcome to this very special podcast. This is the Student Accommodation Podcast Summit. I'm Sarah Canning from the Property Marketing Strategist, and I co-host the House Child Living Podcast with Dini and Dan.
SPEAKER_00I'm Janie Lee from the Property Marketing Strategist. And the co-host of the House the Chad Living Podcast.
SPEAKER_01I'm Richard Stock, the managing director of the tech skill group trading at the University Quarter in the UK, and also multifamily housing in Germany.
SPEAKER_02Hello, I'm Jenny Shaw from Unite Students, and I'm the host of the Accommodation Matters Podcast.
SPEAKER_07And I'm Laura Bosworth from Real Agency and I co-host the podcast Get Real About Marketing.
SPEAKER_04I'm Dan Smith from Student Housing Consultancy, and I'm one third of House the Shared Living Podcast.
SPEAKER_06I'm Rebecca O'Hare, Interim Deputy Director of Residential Services at the University of Leeds.
SPEAKER_08And we're very happy to have you here. Thank you, Rebecca. We've all been in the sector a long time, and when we look back, what is the biggest challenge we have seen in the past 10 to 15 years in student accommodation? Rebecca, I'll let you go first.
SPEAKER_06There's a breadth and depth of things. An hour and a podcast definitely wonderfully talk about wider student experience issues around mental health concerns, the cost of living and affordability, issues around campus, and a range of things, all of which student accommodation in many different ways, although some of you might not necessarily believe that or see that, but it's there's been such a breadth of death of things going on within the sector that really it's been such a challenge for universities and the private sector. So I don't know if we don't have time to go into as much detail as if we'd like to.
SPEAKER_05I'd just say that um I think affordability is one of the biggest issues we've got. The more beds that we can build, the more affordable the beds will be. But the issue is we we haven't been able to build as many as we need. So that affordable stock just hasn't really come to the fore. And I think we focus very heavily on studio-led developments, but also focused on the sort of premium sector or at least the mid-range. And we know from the research that we've seen that students are actually more satisfied in the more affordable end or at the super premium end. So I think there is a bit of a value gap there. We've got to make sure that we are able to build those affordable beds because we're pricing some students out of going to university, to be completely honest, and we'll be putting them off coming into the UK. There's a lot more, and I I know we'll come on to affordability as a key issue, but um but I think that's that's one of the key challenges, building affordable beds.
SPEAKER_07Just following on from that, you said about value and coming from a marketing perspective, I think there's a lot about showing what that value add is, what do students get from student accommodation and how do you market it? I think one of the biggest challenges has been around the Resi experience, and you know, lots of providers coming out with events programs and things like that. But actually, what is the value add and what are they getting for that for the price that they're they're paying? And that goes up every year, and students have a voice, and you know, they have eyes and ears, and they know and they can see that it's going up, and they're very vocal about what they're getting, and then you know, the impact of how we market that is um that's been a big challenge, I think.
SPEAKER_10Just coming back to what Rebecca was saying around kind of all those different changes and the changes in culture and things that are impacting how people go to university and therefore how they live. I'm gonna take it back to actually with just the original questions there were asked around kind of what's the biggest change we've seen in student accommodation. And I'm gonna say, apart from there being a private purpose-built sector in student accommodation, not a lot. Actually, in terms of actually the product we're building, it's really in terms of actually the bedroom, it's still the same it was in the 1960s. Yes, we've got all these great amenity spaces, but to Laura's point, where's the value ads? Are we selling the value ads? Is it what students want? So, my fundamental starting point is actually other than the private sector coming in and building new blocks, really, we haven't really moved on to student accommodation as much as maybe we should have in those years.
SPEAKER_03I I'm with Dan on the affordability bit. That that's the bit for my career in student accommodation that really worries me because uh when I went to Polytechnic and obviously university now, I got a grant, thank you. Now I can see people not affording to go to the university of choice, and I think it's such a shame. When you leave home, you have that rite of passage. If you stay at home and go to the local university, it's not quite the same. I think that's changing, and we have to do something about that. Because all the brand new, the PBSA, a lot of it in the hotspots. When I'm seeing the rents, as we drove in here, I saw the rents in Bristol. Wow, you know, 300 is average. Yeah, and and I'm in areas where I'm thinking, well, I'm gonna be actually 30 pounds cheaper than what's on campus to attract them when they've had the first year on campus. Here? 30 pounds, what's that on 300, 350 pounds? It's a big challenge. I get why people are building in hotspots. Why wouldn't you? But after a while, it's we kind of know in the cyclical property world. Supply meets demand and we can catch a cold, but we really need to tackle affordability because that fundamentally is changing the landscape already.
SPEAKER_09Yeah, so I'm going to talk about the uh operational side, the service side rather than the product. And the biggest change that I've seen organized is really in the role that we play in student lives. So uh when I first joined, it was very much about uh organizing and having a reasonable decent environment. But now it's very much about uh responding to students and providing fairly healthy support and um and I think that's an ongoing trend. I mean we've got uh students coming to university during the pandemic at a really crucial stage of their life, it's affected their mental health, it's affected their social confidence that they're coming to university, more of them have a disability, they're from more diverse backgrounds. So we've really had to keep on having to get really good at uh support and inclusion.
SPEAKER_08I think I'm with Jenny. I think the thing that I think that has changed and hasn't changed over the past 10 to 15 years is the customer. And you know, we I always say we all stay stayed the same or we don't in the talk because we just get older. But our customer base stays the same age, but within that customer base their needs, their habits, their preferences, their experiences all change. And I think because we're talking about bricks and mortar, it's very difficult to keep up with that level of change in an efficient and sustainable way. We can't just decide every year because the needs and whims of students change, we've got to build something different. But I think I guess to Deanny's point as well, is has the product evolved enough for that changing demographic, really, and how they're changing and how their experiences are moulding them, and I'm sure we'll we'll come on to it later.
SPEAKER_05It's a product and a service, how much of that is changing?
SPEAKER_06I would probably argue that it's not changing enough. I think within universities, put my university hat on top of the overwhelming one, how times more easily able to respond to those changing needs of students. Jenny talked about inclusion in students, you know, because that's the requirements, and certainly that's another problem. And we are going above and beyond to meet those needs of students who can have the same equitable university experience as anybody else. And the feedback we get is that they're not able to get that in the private sector, but they're not listening to the needs they have. They don't understand students who are perhaps neurodivergent or who have a complex range of requirements and a complex range of adjustments that they want to put into place. Yes, there are mineral things they will do under the Equality Act, but actually when they want to do more to really personalize that, that's not being done. So they are reliant on the university doing that. And I think that's a real shame. And actually, if more and more operators want to ensure they are putting student voice at the heart of what they do, they need to start actually diversifying the product in that way and be more receptive to those requests.
SPEAKER_07It's interesting everything that's been said. And Sarah, I think it was you that had said about the ability to change because of the operational sense, maybe it was Tony, about the operational sense and how difficult it is to make changes like that. But I definitely think, I mean, even with some of the stuff that you guys at the property marketing strategists have done in terms of asking students and getting feedback, that's now helping to propel the industry, I think, because Rebecca, you've just said there, feedback from students is XYZ. Have we always had that? And now that we've got it, I'd like to think that the rate of change is going to speed up and it's going to get better because we're asking the questions and therefore we can act on the feedback. But also, sorry, to add something else into the mix, I think it was 2016, was it? The first Gen Z went to university around that year, and now we've spent the last eight years talking about Gen Z, and that's been a big buzzword, and now we're talking about Gen Alpha, and you know, how else are we keeping up with it? How else are we making changes? You know, how how is that going to work going forward? Do you think what do you think? Is it is that rate of change gonna get better? Are we gonna be able to do things better and it not take another 15 years?
SPEAKER_09I I think because partly because of the pandemic and partly because just of the rate of change in the world, we're seeing sort of not just generational differences but actually cohort differences, and that's why we've been trying. So this is a shameless plug now, but we've got we have an applicant index which we publish each year, and we we've seen you know some quite dramatic swings between cohorts in terms of what they need and their characteristics and what they but you know going back to the point about um service, it's so much easier to change your service than your buildings. So you know in we need to limit it.
SPEAKER_03I'm with you on on that completely. I think the problem how we can do everything on our phone and we've got to have that human interaction. For me, it's all about human interaction. It's the loneliness that somebody just sat in their room. So really it's about training the first point of contact, which is the cleaner or the maintenance fan. They've got to be that sort of answer.
SPEAKER_07That's not new news though, either, is it? It's not new news. It's just that not everybody's actually caught onto that and done it very well. There was a building in Leicester, and I remember one of the um maintenance staff had um called himself some he's I think it was Wayne or something, and they called him Wayne the Wizard or something, and that's what the students had named him because he could do anything, they could go to him for anything, and he was the first point of contact, and that's not what he was recruited to do. He was recruited to look after the maintenance and whatever, but it just turned out that students really um liked him and kind of got a good vibe, and he was great with them because he was a people person, and I think that goes for the majority of people, so it comes back down to the JD and the people that you're recruiting into the business as well. I think that makes a really big difference to the service that you can offer and the value that you add because ultimately it's students' homes, they're living in these places, and the people that are walking around make that experience for them.
SPEAKER_05They're like gold dust, yeah. Those those staff members who will go above and beyond, whether they are a housekeeper, a GM, a maintenance person, uh events coordinator, or the sort of more recent phenomenon that we've seen with um leasing and marketing strategists that we've seen go into each property or leasing and marketing coordinators in in certain properties. I think getting someone who's a generalist who fully understands what it takes to firstly live in these properties and the problems that the the residents will have, the students will have, um, but then what they can actually do about it and being proactive about it. That's one of the really rare things that I think a lot of third-party operators in particular, and I'm generalising here, I think they struggle with that because I think there's slightly less of a sense of ownership in that way. And the salaries may not be up to the level that they necessarily should be, and and not just on the affordable end or the premium end or wherever. I think that PBSA is lagging behind the likes of BTR, co-living, hospitality in terms of those salaries, and that's where we need to make sure that we are benchmarking and that we are paying people to go above and beyond. And I think we're just kind of scratching the surface there. And in the in the battle, or dare I say it, the race to the bottom that I've seen in some third-party operations, I think that, and that is mainly around the management fees in particular, and I'm trying to educate investors that they do need to improve those management fees. But I do think that there is a correlation between the quality of staff and the quality of service and the reviews you get and the amount that you pay your staff. And in that battle to try and reduce the OpEx fees as much as you possibly can or the OPEX lines, I think there is a bit of a focus on right, we could reduce that staffing, or we can get rid of that person or this person or whatever. So having those generalists that can, whether they're a maintenance person or a housekeeper or the GM or whatever, if they can step in at any time and perform multiple different roles and make sure that the student is happy first and foremost, they are absolutely gold dust. So the more that we can do to educate investors not to try and reduce staffing structures or not to try and reduce salaries just to improve your opex, I think that's what what we need to be doing.
SPEAKER_08But that's the the elephant in the room, really, is if we're looking about the rate of change and whether we can keep up with that change over the next 10 to 15 years, it comes down to money. And, you know, will investors keep insisting on the same level of return as they've been getting over the last 10 to 15 years? Because if they do, then that's going to increase, you know, that's going to show rent increases of 10, 15, 20% year on year, which is not sustainable. But the staff do need to be paid more, and the operational costs keep increasing. So there has to come a tipping point. Um, and uh Richard, you've probably got much more insight on it than than the rest of us, is kind of, you know, will those expectations change from investors?
SPEAKER_03It's tough for us making money. That's that's the the bottom but the bottom line is we've been hit by inflation, interest rates, and um and staff costs have been part of that inflation, and and we we try to pay well to retain staff because you want the same person every year, and and as Dan said, told us the people who are there for 10 years, 20 years, and they grow into their role and they become part more important than the building, really. I'm just back from a a trip to Germany to see our multifamily. The want the blocks that work are the ones with a strong, caring housemaster to call them and and they they look after everyone and everyone knows them and they want to be in that building because somebody really cares to go outside and pick up the cigarette book. That's what I really what really counts.
SPEAKER_07But then we're in a chicken and egg scenario with you increasing your salaries because you need well, you want to look after your staff, but then in order to do that, do you have to increase your rents? And then how do you increase your service without overloading the staff? Well, we were talking earlier about these superstar maintenance cleaners, frontline people that are engaging with the residents. If you put too much on them and just sort of say, well, if we create the great environment, then that is well-being, therefore, we don't need to put a well-being service together, then how are those people going to go about their daily jobs as well? And then you think, oh, well, we're putting loads on them, should we be paying them more?
SPEAKER_10Then you have to come back and put your rents up. But then is this there's a role for technology in this, isn't there, that actually we need to make an investment in technology and progress for where the modern world is. And one thing I, you know, was reflecting on to your original question, Laura, is that actually we've been kind of toddlers, infants, teenagers as a sex year, and actually we're coming into our maturity years, which I'm hoping will bring that level of understanding that actually we can't stand still. We've got to keep up. I think young people are changing at a pace that we haven't seen before. And if we don't keep up, we're gonna become dinosaurs, we're gonna become dinosaurs in the room, and then there will be a new flock of investors that probably come in and go, actually, let's shake this sector up and let's go and do something else. So I kind of feel as we get to that age of maturity, we need to make those smart decisions to say, actually, this service is really important, how we pay people is really important. Um, but actually, a lot of the other stuff we're doing, like the big social spaces, maybe is not as important, but actually, where can technology and where can AI and where can we bring in things that give us those cost savings, which is an investment, not a cost, um, and it's a one-time you know capital cost. Um, and that's maybe where we can start to see those changes that that hit that affordability point.
SPEAKER_09I'd like to go back to your point, Laura, about is it the people or is it the systems? And I think it's so important to you you absolutely have great people uh who are good with people and can build those relationships, but you've got to support them with processes and training and training on boundaries. There's so many ways that this can go horribly wrong if you don't have something backing that up. And I realise that's a lot easier to do if you're a uh a large company rather than a small operator, but it's it's just absolutely essential for everyone's protection and support.
SPEAKER_03I think that's where Unitable come in on the PBSA world, yeah. They do provide great training because we've all been to the um the training.
SPEAKER_05I think I I think you you two are both in quite a unique situation in the sense of your retention rate of staff. I know Richard, we've spoken about it previously, how long people tend to stay with you once they've started. And and I'm sure that you might have all of the staff benefits that that you can imagine from uh from a PLC. And I think that that's that's quite a rare thing in the industry. And I there are a lot of operators that are particularly worried about uh effectively GMs cite staff moving from one building to another, going from one operator to another, and therefore they might not necessarily invest as fully as they possibly could or should in salaries, in staff training, in development programs, etc. And I think that that's something again that it's just something you need to put out there quite selflessly as an operator to say we're going to train our people to be the best that they possibly can be in their roles, give them a development plan to take their roles forward, if that's what they want, not for everyone, and and also we're going to pay them really well. And and by that by doing that, you should then elicit some form of loyalty. And and I think that's where I know that you both have good retention rates of your staff with very little churn. And I work with a lot of different operators and investors who are concerned that operators that their GMs will go from one building to another to another because they're getting paid maybe a couple of thousand pounds more or whatever it might be. But that matters depending on your salary level or what you do. You know, even £500 matters. So I think there does need to be a bit more of a focus on that from all operators, not no matter the level.
SPEAKER_07And do you think, sorry, do you think universities as well? Because I've always felt in the last 15 years there's a push-pull between who's learning from who, between the private operators and the universities. With Res Life, it came in from universities were doing it really well, and then we well say we, private operators, you know, thought, well, we can do it differently. But talking about staff retention, universities, Rebecca, this is your area really, but in my in my knowledge, I'm sure that there's much longer retention of staff in a university. So what what are you doing differently?
SPEAKER_06I think it's probably changing actually. I definitely came into University of Leeds and inherited teams where the majority of team members had cut down a solid 15, 20 years, and I see that in other services in our university and in other universities generally, but it is changing because actually the people who come into posts which have become vacant um or which we've promoted in the last couple of years, they've got a different sense of drive. They have different requests around their professional development, they want to get promoted sooner, uh as soon as possible in some cases. They have very clear requests and what they need regarding trading, development, salary expectations, they want to know about hybrid working, and I think actually we don't really talk about it in the university sector, not really talk about it in CBS generally isn't there's all this talk in society about the four-day week. People are really starting to measure off actually what is available to them because there's all this talk generally within society that better work like balance. And if you go onto social media and you go on to TikTok, which I do, like I talk about this with lots of different people. My algorithm in TikTok is very much about what most gender people will will see. And it's all about like not being a corporate person, not being a corporate person, actually working in a more uh hybrid manner, doing what makes them happy, not conforming to the system, and that is coming in in space now where people are challenging the authorities, so to speak, to create a better society and future for themselves, and it's really interesting. And how do we adapt to that? And how do we respond to it in a way that works for them but works for us? And I think that's gonna be the next thing we're gonna have to see in some universities is these requests for four-day weeks. And I will say, I am an advocate for it, and I've already thought of ways in which we can make it work. And I would love to see a university pilot. I would be so excited to see that happen. And I think that's something that's definitely coming our way.
SPEAKER_05And that's that's one of the difficulties with PBSA operations or university accommodation operations four day weeks. How do you do that when your presence is supposed to be on the site? Like that that is a challenge. That's going to take some investment in support in or or or do you have This hybrid model where you have a ring doorbell or something, and you know you go through to an HQ. There are only certain companies that could that could possibly offer that. And I think there are technological solutions that we could have to bolster that and provide more support to staff, but that is going to be a major challenge to operators to show that flexibility. I think that's that's going to be a tricky one.
SPEAKER_06I don't think the four-day week is as hard as the as you might make it out to be. I actually think it's a scheduling issue. You might have to hire a few more staff. But I think you you can have staff working Monday to Thursday, and then staff working Tuesday to Friday. And actually, if you bring in five over seven-day contracts, because a lot of us need to move in that way to have people available in receptions or at any time of the day for students to be able to access them. You have that caveat of that. You can have people in their four-day week and their three-day weekends, or you can structure it in a way with them have a four-day weekend because they work Monday to Thursday one week and Tuesday to Friday next week. I just thought long and hard about this. I think actually it's a scheduling issue and there might be extra resource required in terms of hiring a few extra staff to make that work, but it's definitely not impossible.
SPEAKER_07Yeah, I was just gonna say I'm gonna be controversial and say I don't think it's as easy as it seems at the exact time that you were saying the opposite. But that's because I was wondering if we were talking about shift work or if we were talking about the business shutting down after a four-day week, and then yeah, how do you manage that when you have residents living there 24-7? But if we're talking about, you know, somebody doing a four-day week, somebody doing a three-day week, then yeah, I agree, scheduling issue. I think it can be done. But then you need the right people on the front line and not the managers in for four days, and then when they're not there for three days, so much stuff doesn't get done.
SPEAKER_10But is this so much about that we've got this structure and we can't move away from this structure? And actually, if we say a four-day week, doesn't mean a business has to shut down. I mean, if you look at the NHS, the NHS never shuts down and it works, albeit maybe not quite well at the moment, but it has worked over the years and it can work, and I think it's just about taking away everything we understood and knew and just saying, actually, what because actually, I absolutely agree with you that I think the next generation of workers coming up want a very different work environment to we had, and we find it massively challenging as a generation when we're really questioned by Gen Zen to say, Well, why would I do that? Why would I work beyond my contract hours? And you're like, Because we have to, and that's not that's not gonna that's not gonna fly, like they kind of go, Well, I don't have to, so my contract says that's what I'm gonna do. And I think we've got to take away everything that we understood around our corporate structures and go, right, okay, what's gonna work for the business and what's gonna work for these people because that's how we're gonna get delivery, and you know, maybe we don't need a Monday to Friday anymore.
SPEAKER_08I think we have to remember that the people that are coming to Rebecca about jobs and flexible work are probably people that have recently graduated who want something different, and we have to think about how that's gonna impact studies, how that's gonna impact students, how it's impacting their lifestyle, because you know, Gen Alpha, that's my my son's age, he's growing up seeing people in flexible work. So that Gen Alpha coming through are going to see this as very much the norm. So, of course, when they come into workplace, then they're they're gonna think it's very strange if people wear suits and they're in the office Monday to Friday, nine to five, because they probably will never literally never have seen that in a lot of ways. But how is that going to impact the way that they study and the way that they they live? And we we're already seeing this, you know, the universities are trying hybrid ways of working, but the PBSA sector and probably university accommodation haven't worked out a way to make that work, and a lot of it is we're beholden to technology, you know, that our systems and also planning doesn't allow for flexible contracts for part-time students to live in accommodation. You know, we that's part of why I think we haven't moved quickly enough, is that we're being held back by certain restrictions, certain red tape, particularly around technology and planning. That means that you know, while students might want to study flexibly, at the moment that leaves a massive hole in where are they going to live? You know, can you know why would they pay for accommodation if you're only on campus three days a week? Where do they live the rest of the time? Can they come on campus three days a week, one week, and two days a week the next and live there and still have an amazing experience? And you know, equally, what if you want to do a three-month degree or a two-year degree, but the contracts just don't align and the technology doesn't? So I'll throw that out there. Like, are we are we actually, like to Dini's point, actually really, really dinosaurs in this situation? And it's it's too far away to meet those demographic requirements.
SPEAKER_03Funnily enough, I just had the word I'm a dinosaur. And I'm just thinking about our summer repair schedule where we ban holidays during the summer repairs. I hope they're not watching this. Um, because we just don't do flexible hours, and um I'm sure AI is gonna change things, and we are open to change and reinventing ourselves over the years, we always seem to do in our sector, which is a vibrant sector, hence we're all sat around the table because we love it so much. But it is gonna change, and I've I do feel the other word dinosaur was in my head I'm a dinosaur, and I fully agree.
SPEAKER_05But I I think in terms that you can look at this from two perspectives: the staffing level and the student level. So, from a staffing level, I mean, when I was at Nido, we didn't really have any holidays allowed in August, and it wasn't something that I mandated, it was just something that, well, if you come to me for approval, I'm gonna make you question that. Is that the right time for you to be going away? Well, yes, there's you know certain certain reasons why I would allow that. But I think there's a lot of operators that say, no, sorry, no, no, uh, no holidays during August, and that flexibility hasn't been shown massively from what I can see in uh all of the work that I've that I've done with clients, both on the ESG front and on the student housing front. And I think that that is something that definitely needs to improve. We do need to look at more flexibility for our staff, but that you know the investors will also uh and the operators uh they are still very much looking at that NOI. Okay, what's that gonna do if I have to get cover during August, if I have to um you know, basically make up for the fact that someone is doing a four-day week, how does that then impact the balance sheet? I think that's one one key problem. And then from a student side of things, I do feel like we're moving towards an era of flex. Now, when I was uh we bought two properties in Liverpool for Needo, to be honest, you know, and and actually Richard. I was just gonna say we didn't actually know what to do with them because there were townhouses, etc. But yeah, Richard, I'm sure you did did quite well out of that. Um, Kexkill then went on to buy them. But ultimately we struggled with what we should do in terms of do we have 51 weeks, 43 weeks? Now, what we did was we split them up into semesters because we knew that there was a strong semester market, Chinese market in particular, was very good for semesters, and we saw Unite doing that as well at the same time in Liverpool. And so I think when that some of those markets are showing real signs of maturity, they look towards more flex. And by that I mean allowing for semesters, now then allowing for short stay. And I think that that's something I've just seen uh the a flex report by Levander, and uh they're not they're not a client, but um just to just to put that out there. But I want to just draw attention to the fact that I do think we're moving towards that era of flex for students. So we're starting to think, uh, hang on, what do they need? They want flexibility, they'd like to move out as and when they want. Well, that's not good for operators. And we've also then seen that in Ireland, for example, and also across various other places in the UK, operators are taking a view on not having a summer. So they're they're saying, right, we're just gonna do 51 weeks because it's easier, it's less hassle, no turnaround, don't have to worry about occupancy over there, we don't have to get uh you know what some of the various short stay providers in. I think that's a real challenge. Now in Ireland, they're actually just mandating, and and I was given a sneak preview of the fact that the Irish government are now mandating that they have to run PBSA properties on 43-week contracts, and that is then going to be a struggle for for various different operators to then say, right, okay, well, we've got rent caps in place, now we've got to make sure that we've got 43 weeks, we're gonna have voids over the summer, how do we deal with that? On the flip side of that, in the UK, we've got a massive shortage of summer accommodation for for language schools, etc. So I think there's a lot of challenges that flex will throw up. I do think that any operator that is um student focused, student-centric, will start offering more flex, but that will come at a cost, probably a financial cost, um, in terms of the total revenue and the annual occupancy across the course of the year.
SPEAKER_09Yeah, I mean we've been talking about flexible tenancies for at least 10 years in the sector, as far as I know, and just the change won't come until the change comes. And when we get to that typical point, I mean the the way that degrees are structured is still extremely traditional. Um there's there's not that I mean there's there's potential for more flexibility in the future, but but we're a few years off, and I think as long as we are ready to be a flexible sector that can respond to what's actually happening in the market, I think we'll be okay. But it it's it's gonna be a change.
SPEAKER_07And you know, we've just got to be ready for it. It takes for somebody to need it though, doesn't it? If the occupancy is there and if the scarcity in the student's mind is there, which comes from the way that certain buildings are marketed, the way that universities set up their agreements with private operators, but until they need to make that change, I don't think investors are gonna do that.
SPEAKER_08That's happening, Laura, and it's being hidden from the data. I will tell you this for a fact that in all buildings when there's 51-week contracts, the students are asking for tenancy takeovers.
SPEAKER_09Yeah.
SPEAKER_08And it's you know, and yes, you can say we don't do that, but the staff are trying to help, they're trying to be kind and they're trying to help these students find tenants to to replace them over the summer. Now that's probably not getting reported on back to investors because, as far as they're concerned, they've sold a 51-week contract, and that flex that's being demanded by the student, you know, they're signing up to 51-week contracts because in a lot of cities there's no choice. They don't want a 51-week contract, and then the impact on that is back on the staff who are not only trying to turn a building around over the summer, they're then trying to deal with tenancy takeovers, they're trying to sell for the following year and they're having to um do summer business. It's absolutely crazy.
SPEAKER_07Who's brought their prices down over the years and sold a 51-week for a 40? It'll say 51 on the tenancy, but actually the rent reflected is it it's the equivalent of say a 45-week because they want to have that 51 week, but the students don't necessarily want it and it's for their two weeks.
SPEAKER_05So are we moving into an era of affordability whereby there's more flex, the students can almost move out as and when they want, or they can have semesters. Um, and you know, I I I'm loath to mention this, but the the only party that looked at a potential two-year degree course was uh was reform. Um, and uh I know, uh apologies, everybody around the room is is wincing. Um obviously Labour were very tight-lipped on on their plans for university funding and uh affordability issues, but but yeah, that two-year degree course, it may be that the universities have to start thinking along the lines of right, what can we do to make university more affordable? I think that is a can that they have kicked down the road for for quite some time because you know, why would you shorten your degree courses when you're already strapped for cash? But that is something that we we may be able to see. So we may be on the verge of uh an era of more affordability. But there's there's obviously a lot of challenges that go with that as well. I mean, from a building perspective, the way I see it, the more beds you build, the more affordable the accommodation becomes. Just look at Coventry, for example, and and the the average rent there, and the difference between there and Bristol and Glasgow, and we are on that verge of pricing students out, of going to certain locations, but it is really challenging to build at the moment. It's challenging to buy. You have the sales agent saying, Yep, go and buy in Coventry, it's it's absolutely fine there. Um, there's an undersupplier, and they're not looking at the right data. Um Richard Ward at StuRentz has just done some really good work on the data that they're actually using and bringing in HMO data and um what the students are studying, are they staying at home, etc.? And you know, obviously the sales agents are gonna say, buy and build in Coventry, or that everything's looking rosy, we're thinking it's gonna be a really good Q4. I I'm I'm not convinced. Most of the investors that I talk to are saying it's um well, they they were saying it was gonna it would survive until 25 and then fixed by 26, and now it's heaven in 27 is the is the next key theme. But does that mean we have to wait that long for a significant number of beds?
SPEAKER_07It's not marketers coming up with this line, is there?
SPEAKER_05No, no, it's definitely not. It's definitely investors. But but yeah, I think that the challenge that we have with cost of build, cost of capital, cost of acquisition, etc., that is the biggest barrier at the moment that we've got to to actually to build it. I mean, then you throw in fire eggs, building safety acts, etc. You're adding 15 months to a build programme according to Sue Churchill at Church Lucas. Now there's there are so many issues now with with regards to getting those beds built that I think affordability is becoming something that ultimately I think governments have and potentially will try to mandate. You know, just look at the um the Greater London Authority and the affordability mandates there. It may be that the meralities all go for that and that that spreads out across the UK, and therefore we don't end up seeing that that uh the breadth of beds that we want to be built. So I do think there are still quite a few challenges to get to that really affordable um student accommodation that we want across universities, because universities tend to follow um the private sector. Uh private sector have driven the rents up. Universities are quite happy to follow that and say, well, hey, they jump first. Uh Rebecca, I'm I'm you may disagree with that, but um, but ultimately I think we've got some opportunities here to show affordability in certain ways, but there are so many barriers and challenges to that.
SPEAKER_10But there is a threshold when it comes to affordability, and I have said this before, and I'll continue to say it, is that the sector has to look after itself when it comes to affordability because you reach that threshold and go beyond that threshold, people just won't go to university. That's their defeat. Yeah, and I just think that whilst yes, if the sector doesn't change, the governments will have to go and do something about it. A smart sector would go, hang on a minute, we need to do something about it because it's just not maintainable.
SPEAKER_05But I think that that does come with occupancy in particular. Now I'm I'm getting a lot of calls from people in Nottingham, in Leeds, um, and people thinking about the future of Bristol as well, as to the number of beds that are popping up there, the fact that the likelihood is their occupancy will drop, and and genuinely just look at Sheffield, Coventry, Times Liverpool and Newcastle have been the same in the past. Where the occupancy's dropped, what's the first thing to go? Well, you give out big offers. I remember giving away one and a half thousand pounds cash back to get someone into a room late on in the market in Newcastle. That was when it was Newcastle was pretty tough. Now you wouldn't need to do that. So it is all cyclical, but I do think that there's definitely going to be that opportunity for students to ultimately have an affordable education, affordable accommodation, because we build that many beds that ultimately those costs end up coming down, and then it becomes a survivor of the fittest, and that's what you want. That's what you want from at the moment. We're still shooting fish in a barrel to a certain extent. Every operator in Coventry would disagree with that, but most markets it is still going to be pretty reasonably easy to get to 100% occupancy.
SPEAKER_07I I think that a lot of operators think that it's old hand, they know what they're doing. And just what you were saying there about that cash back, there's there's so many of my clients that bring us in because they're doing the same thing every year and they've got a strategy and it gets rewritten, and by that I mean they change the date at the top and the date that it was sent to the client, and that's literally all that happens. And if something new comes out from you know, UCAS or accommodation of students, a new service, you know, a clearing thing, they'll pop it in because you know, if somebody's doing it, they want to do it as well. Um, and that's kind of the only thing that changes. But then we've got the data that says that every cohort is different because they're people and they are, and every generation is different. So why aren't we changing the way that we're communicating with them as well? You know, it's not just about you know the affordability and well it is it's a big part about that, but how are we the occupancy side? Like you say, they will they'll vote, they'll talk with their feet. I'm so pleased that you mentioned student's bringing in the HMOs because HMOs are massive. And when Newcastle went through that huge challenge a couple of years ago, there's huge HMOs there as well, and everybody's sort of going, Oh, where are all the students going?
SPEAKER_10Well, they're in Jesmonds.
SPEAKER_07Well, yeah, they're all in Jesmond in a 50 quid a week house because they don't see the value because you haven't updated your marketing strategy to tell them what you're offering when your prices are very high, but you're offering them discounts under the table, which isn't visible to anybody else. And I think that those operators are kind of dinosaurs when it comes to that side of things, and I think that's definitely an area that we need to be um challenging ourselves on and being a bit more honest on. And if we were more transparent and doing things that weren't under the table and including stuff in the data, like you said earlier, Sarah, we could move forward, you know?
SPEAKER_10But I mean we've got three marketeers around this table, and you know, we've talked a lot about what's coming down the road, and there's flex, there's changes in contracts, then there's short-term contracts, there's changes in what students want. You've talked about kind of are we communicating the right things to students? But do we have the right breadth of experience in marketing? Do we have the right budgets to support that marketing change? And how do we actually market when all that's coming aboard? When we probably do often have a sector that doesn't really value the role of marketing in actually what they're trying to achieve and what their objectives are.
SPEAKER_06That's quite interesting, Deanny, actually, because within within universities, some universities there are marketing teams centralized approaches, but at least it's decentralized. So we have our own marketing person within the facilities director who works closely at residential services and they've been with us for a number of years to really start to understand the sector and understand actually what our service needs to communicate the breadth and depth of combination that we have and how do we communicate individual buildings and things like that. But you see in other universities where I've got colleagues working where they don't have that individual person or a team people support them working supposedly with them, and they really struggle to communicate to central marketing to say, we need you to help us with X, or to help understand that. So I think, yeah, there probably isn't that experience or understanding of that expertise that you're talking about, that like like the view, Sarah and Laura will have.
SPEAKER_09There's also an issue with who you mark them to, because I think we often think that we're marksember students, which we are, they're the purchase it. But what about parents? And and something I think about a lot because a lot of what we do is very much about the the support side and the inclusion and safety and so on, which is probably gonna mean more to the parents and the students, and so you know who whose hearts and minds are trying to capture in that.
SPEAKER_07I did think that when we were talking about the four-day week, I was thinking, I wonder what a parent coming to the university or coming to an open day and talking to the accommodation and sort of saying, Um, are you gonna be here when my child moves in? Because that was always a question when we had a new mobilising building and there'd be somebody that had been hired to sell, basically, and then the manager would be hired later because their salary was more expensive and they didn't want to bring them on until the building was very ready. Um and that's changing a lot now because I think there is an understanding that you're selling to the parents as well as the student. And although the student probably cares, they don't want to show that they care, but the parent is quite happy to say, Are you gonna be here? Um so yeah, that's really interesting.
SPEAKER_03I think a lot of what's been said is about PBSA, and you've got to take into account the returning student, they've already been there a couple of months before we pick them off. And they actually some of them don't want to live in PBSA. You mentioned um Newcastle, you might advertise it for the world. They do not want to be in a big hall, they want to be in a house in Jesmond. And I can't do anything to change it. That is their preference, and they see the the studentification of that area. So I want to be there, I want my own house.
SPEAKER_08I think that's one of the biggest failings of PBSA. I don't think we've been able to compete with HMOs, and like you said, there are certain markets that, whatever way you look at it, that lure of a of a house is is the thing that drives them. And you know, mean deaning with our clients, we do talk about it, and you know, part of the failing of the sector I think is that we talk about rooms. Like I don't I still don't know why we're talking about rooms, but do you want to live in a room? Like, I I don't I don't want to live in a room, like and I don't definitely don't want to pay 13,000 pounds a year to live in a room. I want to live in a home, and it's not just a room, and I think you know the sector is underplaying it, and because everybody uses the terminology room, then everybody else has to use the terminology room because then everybody has to compare like for like, but it's not a room, you're in a flat, you know, whether that's a studio flat or whether that's an in a cluster flat, you're in a flat. You have access to a kitchen, a living room, a dining area, you have an ensuite, you have a front door, but we're not marketing it like that, and the design isn't really supporting that way of living either. So I do think that there's a whole way that the PBSA sector could compete with HMOs in a much better way and try and open up the potential of living in the PBSA to somebody that would normally go and live in an HMO. And it's it's something that you know, Dean and I would love to get the wider sector in Laura. Maybe that's something that the three of us can work on and brainstorm and try and move that terminology on.
SPEAKER_07Yeah, I agree. I've had a a very long, probably weeks-long debate with um a client um a couple of years ago about the term cluster, um, and one should we use the term cluster? And um I was sort of talking about it from the perspective of that's what the student understands because all of the other operators are using it. Um it comes down to rooms as well. Um, when you're marketing your prices, some say bronze, silver, gold, some say standard, just and they have different room names and stuff, don't they? How are students comparing them? And this is the problem with HMOs, they do get a house, but sometimes they come out of it with a bit of an odd experience because of the bill situation. And we've had campaigns in the past where we've tried to do a comparison. There's nothing wrong with living in a HMO, but it's just about trying to say it's not just a room in a PBSA, it's more than that. And I think, yeah, the terminology I would love to get into that and kind of have that whole big debate. But sorry, just adding on to that as well, we've asked students, um, and I'm sure everybody around the table has as well, why did they book with us in the first place? So we went on to specifically ask at the end as well. We we've looked at why you said you booked, you know. So if it was because you had a gym, because you had a pool, I really liked you know something specific about it. If it was the gym, I think it was like 10% of the people that said, Oh, I booked it because you had a gym have actually used it. So I think getting to grips with what they what they think they want and what they actually want is quite interesting. But putting that, holding a mirror up to them, I don't know how to do that without nobody wants that, do they? So I don't know how to sort of say this is what we think you want based on what you said.
SPEAKER_10I'm just coming back to challenge Richmond who said I can't do anything about that because I want to live in HMS, and I can't do anything about that. Actually, as a sector, that's exactly what we can do something about, is that you take the market research, you take the gap in the market, and you build something that meets that gap and that need, and I think we've just got a bit complacent.
SPEAKER_03I would agree, we're kind of a hybrid. I was just gonna do it. I mean, I won't say you're not actually you are doing back in the day, 15 years ago, our most successful adverts was come and live with your mates in our house and get a party pack. The party pack was a whole load of booze in the game of Twister. The game of Twister always into the deal, and that worked at and then at the end, when they're all moving in, they're all picking up the party packs out of Twister. That was proper marketing. You don't do that anymore now.
SPEAKER_05We did. I think that we've got a lot of work to do to break that well-trodden path for domestic students in particular, whereby first year you're typically in university halls, second year you've met five, six mates, and you go into an HMO. I still think that's the case. I think we've got probably another 10-15 years before we can break that. And I know that the government, previous government, were trying to bring in the renters reform bill, which was likely to see more HMO student properties come back to market or go back to general housing, because it would be more prohibitive for them. But breaking that well-trodden path is really, really difficult for domestic students, and that is the holy grail. Now, I have seen more marketing more recently from uh various different operators of all sizes in really competitive HMO markets. So the likes of your Birmingham or your Newcastle, Liverpool, etc., where it's literally like you know, you could live in HMO XXXXX against a load of different criteria, or you can live in PBSA, it's amazing, tick, tick, tick, tick, tick. And I do think that that's what we still need to be reinforcing because you know there is an there is an alternative to to HMO, and it's not necessarily that that's better, but I think that we've got to get better at showcasing what the strengths are of PBSA against HMO. And Richard, obviously, you can do both effectively. And I think that that's I've got a lot of clients as well that are have HMOs, or they might even have their own HMOs, and then they have PBSA books. And I do think that that's it's finding that happy medium between bastardizing HMOs and you know, really singing the praises of PBSA. Well, no, there's a right fit for each person. You've just got to be really clear about what the benefits are and how we can uh how we can showcase that to the student because ultimately you want the student to have a really good time. If they're not right for PBSA, that's fine. You know, whether that's affordability, whether that's a social side of things, whatever it might, or location, whatever it is, I think we've just got to make sure that we are looking after the students first and foremost, but communicating to them on their terms, HMO is this, PBSA is this, being really clear about it. But I'm seeing the lines blur more and more. And the bill splitting or the bill aggregating, rather, um the likes of Unihomes are doing that for it for the HMO market, whereby students just have one payment taking away all the hassle, and also then you know, so you've got your your rent payment, then one bill payment, etc. That's blurring the line between then PBSA and HMO, it's closing the gap on on the cost. So there's definitely some kind of a hybrid model that I think we will start to see more and more of.
SPEAKER_07I think it'll look different as well. That leaflet, I can visualize so many of them. It's going to change instead of you know HMO, no gym, PBSA gym, it's gonna be things like um pastoral support and things like that. And I'm hoping that students would appreciate that because that's the feedback that comes through that they want more of that community and that support. And I think that's what operators are that's what they're able to provide now, and that's what our client, I'm seeing the word wellness a lot. Yeah, not a bad thing.
SPEAKER_05As I'm sure Jenny is very much so, and and and a lot of the work that you're doing at Unite, you're communicating really openly with the rest of the sector, and I think that's really appreciated from a sustainability standpoint, but also um diversity, equality, inclusion, and the general well-being of the students. I think the more that we can have our largest PBSA operator doing that, leading the sector, I think the the better.
SPEAKER_09Thank you. That's what we're trying to do. If if it then if it's all students, that's that's what we want. We've talked about lots of different things. We've we've gone all over the sector and I think put the world to rights. But just to finish up, shall we have a quick fire round and go round? Uh, each of us say, what do you think is just the biggest thing that's going to affect our sector over the coming years?
SPEAKER_03The biggest thing for me, Jenny and I come from the same town. I only the same city. We're born in the same city, very close to each other. The fact that we are sat here is because we left or went to university. If people don't have that right of passage, it makes the people we are now, and it's such a shame. We've got to get affordability right, and I'm really passionate about it because it's we carry on on the upper, upper, upper rents, it's killing the market for us.
SPEAKER_05For me, uh it's it it is affordability. It has to be. We can't be pricing out students from going to university in any particular city or any particular country.
SPEAKER_07Without a doubt, I agree. Affordability, but I just need to say, I think finding a balance between in real life and tech, I think there's a really fine line there. And I I always talk about this with real and with local life about doing things in the real world and having real relationships, getting out of your room, and maybe even just into your apartment um or into the social spaces, or um just living in the real world rather than just having the tech. I'm I think it's a fine line. I think that's going to be massive in terms of what the actual offer is.
SPEAKER_08I think the biggest impact for the future in the sector, and it and we might sleepwalk into it, I think will be flexibility. And I do think that potentially the new government will be a champion of more flexible degrees and apprenticeships. And I don't think the sector is quite geared up for it, whether that be technology or whether that be the product or whether that be communications. So I think that would be the biggest lesson, really, is to think about how you can prepare for that because I think it's coming.
SPEAKER_10Unsurprisingly, Sarah and I agree. I was gonna say the same is that actually I think we've seen exponential growth in technology and the way that young people live their lives, and that is gonna have an impact on how they want to study, how they want to do their education, and it's not necessarily gonna be about going to get a degree in a university, it could be about doing an apprenticeship degree, and I think that that exponential change that is coming fast towards the sector, they're not prepared for, and I think that's one of the big standards.
SPEAKER_09So I'm gonna answer my own question before I give the last word to Rebecca. I think one to watch for is the demand and the need for more inclusion and potentially a bit more of a personalised uh approach to the tenancies and the and the services. I think that would be good on the surprise, and I totally agree with Jenny's point there.
SPEAKER_06I think there is uh an educational opportunity to teach the powers of the investors and decision makers in the sector to really drive out and create things about what intersectionality really is, what it is in practice, and to help them resent what true inclusion is. So it's not a ticket box exercise. That we really can work towards that active experience for all students and staff who work in our buildings. And I think once we get to that point or at least move at a quicker pace towards that, that can help us achieve many of the points that some of you have raised today.
SPEAKER_08Thank you all so much for listening. We hope you enjoyed that discussion as much as we enjoyed recording it. Now, please stay tuned across the summer for more really special summer sessions episodes. Thank you all, and we look forward to bringing you another episode of House very soon.