While Rome burns …

It has been a pretty depressing and stressful week at Cardiff University.  The financial model of higher education across the UK has been broken for a while, and colleagues in other institutions have been massively affected by the disastrous reliance on markets beyond their control.  The massivication of higher education in the UK has been partly funded by fees and grants, but also significantly subsidised in some institutions by an overseas student market which has declined.  What we are witnessing is the sacrifice of a globally highly regarded sector as a result of the failure of the financial model.  Highly geared universities which have become reliant on those international markets have found themselves being forced into significant changes, voluntary severance, and potential redundancies and departmental closures and mergers as their loan covenants come in to view.  It is a failure of government and a failure of marketised higher education, and we are right to be angry about it.

However, there is one part of the sector which is, or appears to be, booming that quite often goes under the radar, although there is a developing academic literature (to which I have contributed and hope to do so again) – as always, I have put references at the end.  The growth in numbers of students in HE in the UK, and the model of moving away from home, drives an accommodation market for first year students that has become a financialised, globalised part of the HE infrastructure, which has become an asset class in its own right.  Purpose-built student accommodation (which even has an established acronym of its own “PBSA”) is big business and University towns have become dominated by massive developments of students halls of residence. Those halls of residence – and, at a basic level, beds – are bought and sold on a global scale.  Truly, to use the title of Brett Christophers’ important book, our student’s lives are in their portfolios.  They are massive business, with companies being sold for billions.  And, as my friend recently reminded me, where there is cash to be made, there are some charlatans operating in it.

So, while my colleagues were receiving their redundancy consultation notices, Greystar, a real estate and property company, was buying PBSA in Cardiff (and Exeter) called “The Neighbourhood” for megabucks.  We are told that

Ben Mowbray, managing director – investment, Greystar, said: “The acquisition of two new PBSA assets in highly sought-after locations aligns perfectly with our strategy to expand our footprint in key student markets across the UK.

“With the number of full-time students in the UK expected to rise to 2.5 million by 2030, the demand for high-quality, professionally managed student accommodation continues to grow and we are well-positioned to leverage these opportunities and provide secure returns for our investors while creating vibrant communities where students can thrive.”

At some point, though, parts of this market are likely to become problematic and fail or, at least, be affected by the same kinds of influences as the sector it supports.  There is said to be more student accommodation in Liverpool than there are students, for example.  Bougie type accommodation which has developed for international students in some areas is likely to fail, or at least struggle for market share.  And, that must be a good thing because the consequence of the development of PBSA and its market segmentation has been increasing prices across the board for halls of residence, and increased segmentation of students on the basis of ability to pay; which, let’s face it, is against the egalitarian ethos of education.

Further reading

Engelen, E., Fernandez, R. and Hendrikse, R. (2014), “How finance penetrates its other: A cautionary tale on the financialization of a Dutch University”, Antipode, 46(4): 1072-91.

Kenna, T. and Murphy, A. (2021), “Constructing exclusive student communities: The rise of ‘superior’ student accommodation and new geographies of exclusion”, The Geographical Journal , 187(2): 138-54.

Reynolds, A. (2020), “Geographies of purpose built student accommodation: Exclusivity, precarity and (im)mobility”, Geography Compass, 14(11): 1-18

Reynolds, A. (2022), “Contesting the financialization of student accommodation: Campaigns for the right to housing in Dublin, Ireland”, Housing Studies (online first).