Student accommodation and its planning contributions

Student accommodation planning contributions are shaped by one fact: purpose-built student accommodation does not produce dwellings in Class C3, so the affordable housing policy in most local plans does not bite directly. Authorities respond either with a policy that asks for affordable student bedspaces, or with a commuted contribution towards conventional affordable housing, or with nothing at all beyond the levy. Which of those you face depends on the adopted plan and on how the scheme is classified, and both need settling before you buy the site.

Which use class the scheme falls into

Classification decides which policies apply, and it is the first argument on most schemes.

Halls of residence provided by an educational establishment fall within Class C2 of the Town and Country Planning (Use Classes) Order 1987. Privately operated cluster accommodation, with shared kitchens and a management presence, is generally treated as sui generis, outside any class. Self-contained studios with their own kitchen and bathroom can fall within Class C3 depending on how they are configured and occupied, which brings the full weight of housing policy with it.

Ask the authority for a view in writing at pre-application stage. A scheme that the applicant treats as sui generis and the council treats as C3 will attract a full affordable housing requirement and a different levy rate, and discovering that at validation is expensive.

Why affordable housing appears at all

Where accommodation is sui generis, the local plan may still seek a contribution, on the reasoning that the site could otherwise have delivered market and affordable homes. That is a plan-making judgement, and it only binds you if the adopted plan says so.

Read the plan carefully rather than accepting the officer's summary. Some policies apply an affordable housing requirement to all residential development including student schemes. Some apply it only where the site is allocated for housing. Some set a bedspace equivalence, converting a number of student rooms into a notional number of dwellings before applying the percentage. Some are silent, in which case a request for a contribution has to be justified against the tests in regulation 122 of the Community Infrastructure Levy Regulations 2010: necessary to make the development acceptable, directly related to it, and fairly and reasonably related in scale and kind.

An Affordable Housing Statement is the right place to set out that analysis, whether the conclusion is a contribution, an on-site offer of affordable bedspaces or a reasoned case that neither is required.

The London position

The London Plan 2021 deals with the question directly. Policy H15 expects purpose-built student accommodation to secure at least 35 per cent of the accommodation as affordable student accommodation, and it links the fast-track route to a nomination agreement with one or more higher education providers. The affordable rent level is tied to the maintenance loan, and the Greater London Authority publishes the figure, which changes each academic year.

Two practical consequences follow. First, the nomination agreement is a commercial negotiation with a university and it takes months, so start it before the application rather than after the committee date. Second, the affordable bedspaces have to be reachable in practice, which means the agreement needs to say what happens when the institution does not take up its allocation in a given year.

Boroughs also apply their own policies on top, and several have adopted a stricter position on the location of student schemes. Verify the current London Plan text and any borough policy against the published documents rather than relying on a summary.

The levy and student schemes

Purpose-built student accommodation is chargeable development for the community infrastructure levy where the charging authority has adopted a schedule. Many schedules set a separate rate for student accommodation, often different from the general residential rate, and the calculation runs on gross internal area with an index applied.

Three points are worth putting in the appraisal early.

• The self-build and residential extension exemptions do not apply to student schemes.
• Demolition of an existing building can generate a deduction for existing floorspace, but only where the building has been in lawful use for a continuous period of at least six months in the preceding three years.
• Levy liability crystallises on commencement, so the assumed rate needs to be the one in the schedule as indexed at that point.

Charging schedules are revised, and the indexation is annual, so read the current schedule from the charging authority's own website when you appraise.

What else ends up in the agreement

The section 106 on a student scheme usually carries more management obligations than a conventional residential agreement, because the council's concerns are about how the building operates rather than what it looks like.

Expect an occupancy restriction defining who counts as a student and how occupation is evidenced, limits on vacation letting, a management plan covering move-in and move-out days, a car-free or permit-free restriction excluding residents from local parking schemes, and cycle parking secured by condition. A travel plan with a monitoring contribution is standard, and a Travel Plan prepared at application stage rather than by condition gives you more control over the monitoring obligations you are signing up to.

Where the scheme is large, an employment and skills plan and a local labour clause are common. Play space and open space contributions rarely apply, for the obvious reason.

Where viability comes in

National guidance is clear that where a scheme complies with all the policies in an up-to-date plan, viability should not need to be revisited at application stage. Student schemes often do not comply, either because the plan is silent on the use or because the affordable requirement is written for dwellings.

When you do prepare a Viability Assessment, follow the Planning Practice Guidance on viability and the RICS professional statement on financial viability in planning. Benchmark land value should be existing use value plus a premium, not the price paid, and an assessment that starts from an overbid is the commonest reason officers reject the conclusion. Assume the report will be published. Most authorities now require viability evidence to be made public, and requests for confidentiality are refused more often than granted.

The evidence base that supports the case

The strongest student applications carry three pieces of evidence beyond the standard pack.

A need assessment, using published student numbers from the higher education providers in the town and the supply of existing beds, shows why the accommodation is required. A housing market argument, showing how many houses in multiple occupation could return to family use as students move into managed accommodation, converts the scheme into a housing benefit rather than a housing loss. And an Economic Impact Assessment quantifies construction and operational employment and local spending.

Put the need evidence in first. It is the point most objections attack, and a scheme that cannot show demand will struggle whatever it offers by way of contributions.

This is general guidance rather than legal advice. Local plan policies, levy rates and the London Plan requirements change, so check the current published documents with your local planning authority or a qualified professional before relying on this.

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