Student housing scheme delayed by market ‘perfect storm’

A major student housing development has been delayed by a “perfect storm” of falling student numbers and soaring building costs.

Plans for 566 student bedrooms in four blocks in the grounds of Mouslecoomb Place were submitted in 2022 and approved in January 2024.

But developer Richard Upton, who through his Cathedral Group companies has previously built the Preston Barracks and Circus Street schemes, says work is unlikely to start until at least next year.

Mr Upton said: “It’s a perfect storm.

“One of the first things that decimated the student accommodation market was covid.

“Now lots of students say they can work from anywhere. There’s clearly been quite a significant shift to commuting to more local universities.

Then the Building Safety Act added the need for another process of technical process for the safety of taller buildings.

“It costs about £2 million to get planning consent. It now takes a year and costs another £2 million to comply with the Building Safety Act.”

He said another factor was the fall in international student numbers.

According to the Higher Education Statistics Agency, the number of international students studying at both the University of Brighton and the University of Sussex has fallen from 8,840 in 2018/19 to 6,865 in 2024/5.

The number of UK students studying at Brighton has also fallen over the same period, which saw its Hastings and Eastbourne campuses close. At both universities, the total student numbers fell from 39,625 to 34,695.

Mr Upton said: “The government has been putting the brake on some international students

“One of our oldest and most suitable exports is education. Those brakes are now coming off.

“In Brighton, there’s a blip, because about 2,000 students moved here when the University of Brighton closed its Hastings and Eastbourne campuses.

“That is a lot and that has given some resilience to the Moulsecoomb accommodation environment.”

All this means the last couple of years has seen a slowdown in the market for purpose built student accommodation – and therefore the willingness of investors to back it.

But Mr Upton is confident that good quality schemes will still succeed. He said: “Too many developers chased a luxury end but very few rather than looking at the meat in the market, which is ordinary people and the affordability to their parents – parents who are willing to pay £20 a week extra for their daughter to stay somewhere safe.

“There’s a level of luxury that most students don’t need.

“When you provide good quality at the right price, you start to see the local housing market releasing houses back to families. Houses which had been owned by, frankly, racketeers putting students into tiny rooms for too much money.

“That’s the most important thing for Brighton – you need homes for families, with a garden that’s much more important for the social fabric of the city than students living in unregulated HMOs.

“When you’re making an £150m investment, you need to take a long term view. I’m now 58. You can get extremely nervous at certain times of the market and excited at others.

“But even if you look at the most miserable data, it shows there is a shortage of student bedrooms.

“Rents are becoming more affordable. But we are actually building less, and a period of less supply will only mean one thing – costs going up and housing becomes even less affordable.

“Moulsecoomb is a project of the right scale, beautifully designed and we have the focus to take it to the next level at the right time.

“Rents will probably start to go up again in 2/3 years’ time.

“To use a surfing analogy, you are there on your board waiting to catch the next wave.”

How student numbers and accommodation choices have changed in Brighton