By using this website, you agree to our use of cookies to enhance your experience.


Covid-19 impact – could temporary change of use help student providers?

With all face-to-face teaching across the UK on hold for the time being thanks to the coronavirus pandemic, student accommodation providers have found themselves in a potentially dire situation. 

While some university residences, be that halls or private rented accommodation, have remained open following government advice for students to stay put while the current restrictions remain in force (albeit with limited on-site facilities), most haven’t.  

Many purpose-built student accommodation (PBSA) providers have been forced to release students from their contracts several months ahead of the end of the academic year, forcing vacancy rates to soar upwards and rents to plummet. As a result, there is the obvious potential for significant ramifications for those providers whose economic margins are already being squeezed. 


It’s expected that UK universities will witness a further fall in student intakes this September as the global effects of the pandemic continue to filter through. Some institutions are even contemplating pushing the new academic year back to January 2021. With all this in mind, the future could be said to be looking decidedly bleak for the PBSA sector – which until now has been one of the property market’s fastest-growing.    

However, in a bid to combat the decline in demand and lost income, Lambert Smith Hampton (LSH) is advising multiple clients on repurposing existing accommodation into space aimed at young professionals, similar to the Build to Rent (BTR) or serviced apartment models – ‘where the sector is currently flying’. 

Additionally, other potential alternative users could include a mix of private residents and key workers, in particular, NHS staff currently at the frontline of the epidemic – although LSH said this would obviously be dependent on rental values.   

“As with most matters concerning Covid-19, the scale of this issue is evolving rapidly but it is potentially hugely significant for providers of PBSA and hoteliers in particular,” Alan Pearce, head of planning, development and regeneration at LSH’s Bristol office, commented. 

“Some universities will make the call about the start of the academic year in due course and this will have a major impact on when students take lodgings and subsequently what rental income the providers will receive” he added.  

Some students will simply not come in 2020 even if universities are open for business, Pearce claimed, as the effects of the pandemic continue to play out.  

“This will be particularly evident across the foreign student market, with an estimated 485,000+ non-UK higher education enrolments now in jeopardy. Remote learning will help in this respect. However, there is still likely to be a significant impact.”  

Pearce said that, depending on the site location and characteristics, a change of use for a temporary period could help to alleviate the situation. “And, in our experience, most local planning authorities will be sympathetic to the situation and be keen to avoid empty buildings or worse.”  

LSH says the reason behind the growth in the BTR sector is purely academic, with the number of households in the private rented sector increasing exponentially and projected to account for at least a quarter (25%) of the housing market by 2025, according to the Office for National Statistics.  

BTR occupiers (‘aka customers as opposed to tenants’) are more discerning, LSH adds, in respect of the level of service, quality accommodation and value for money of their rental home. With the latest figures suggesting that there are just over 152,000 BTR homes throughout the UK (either delivered, in construction or in the planning stage, LSH believe there is a chronic under-supply given the growing demand for this type of rental experience.  

Ian Scott, national head of Build to Rent & PRS at LSH, said: “The emergence of BTR as an asset class has started to address the growth in demand from the private rented sector, but in reality, not enough purpose-built rental product is being delivered, both in urban city centres and suburban towns and villages.”  

He added: “While an element of the rental market is attributed to affordability of housing and barriers to homeownership, there has been a behavioural shift towards renting over the past 10 years, particularly in the younger generation, where it is more of a lifestyle choice. Anything we can do to alleviate the chronic under-supply in the short to medium term, whether that be re-purposing existing stock temporarily or otherwise, is a step in the right direction.” 

Elsewhere, room rental platform Badi has applied a free cancellation policy to all cases where either the tenant or the landlord have been affected by the Covid-19 situation. You can check http://www.badi.com for further information or contact bookings@badi.com if you need any assistance or advice regarding your existing or future bookings through the platform.  

It has also issued the following message to users: “Always follow the instructions of your local authorities surrounding the crisis. Social distancing has shown to be the best way to stay safe and help slow down the spread of the disease, so our best advice is to stay at home.” 

Airbnb, meanwhile, announced last week in a letter to its hosts that it has further extended its full cancellation policy (to May 31) due to the ongoing coronavirus pandemic and has set aside $250 million to help pay hosts for missed or cancelled bookings. 

Poll: Could temporary change of use help student home providers?



Please login to comment

MovePal MovePal MovePal
sign up