There has been an article in the Guardian about private equity going into building student accommodation. There are new student accommodation blocks going up in various parts of Newcastle. It seems to me that this sort of build is being touted as way of rejuvenating some of the more deprived and run-down areas of the City. Liberty Living have built a block in Elswick.
In the past ive been to meetings where this has been discussed by the local Council. The developments seem to be a mixture of University- built ( and presumably managed) Halls and privately built and owned. I've seen a mailshot, not sent to me , I may add, from one of the Companies putting money into this is Brandeaux . They quote a return of approximately 7% on a minimum investment of £100,000, so there would seem to be good money in this. The accommodation is targeted at the more expensive end of the market. A quick internet search found that for 2 of the new blocks in Newcastle Northumbria University and Newcastle College are in partnership with the private developers. So the Universities and Colleges can say they are doing something about the numbers of students that they just dump on the local communities. Its not going to help the larger numbers of students looking for reasonably priced accommodation that is an acceptable standard, so wont do anything for equitable , affordable access to higher education.
These developments have been encouraged by the Council. Undoubtedly it is getting money into some of the more under-developed areas of Newcastle. The Council says it will increase student choice. The landlords have been against the developments. What will it do for the student accommodation that blights some areas of Jesmond ( and Heaton and Gosforth) ?
Jesmond has traditionally been one of the more expensive areas for student lets due to the size of the houses and convenience for the University, so this is potentially competition. Those that can afford it - many from overseas - may take up the new accommodation. Some of the students currently renting in Jesmond may go .
Student numbers are unlikely to increase over the next few years, and may fall. So what will happen to properties in Jesmond ?
Some landlords may sell off some of their portfolio. Rents may fall due to the competition. Money spent by landlords on maintenance may fall (but they spend as little as they can now, so I don't think that will happen) If rents fall students who previously could only afford Heaton may move into Jesmond . One landlord has suggested to me that we are better off 'with the devils we know' , rather than a different bunch of students. I think he's wrong. the new students wont have cars , so parking will be easier, and they may not have as much disposable income to go partying in Osborne Road.
So overall I think we will be better off.