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Towards a new London Plan: Balancing opportunities for PBSA
Purpose-built student accommodation (PBSA) continues to represent a key opportunity in London development, with student numbers growing since the introduction of the London Plan in 2021. Unsurprisingly, the new London Plan consultation therefore poses questions that suggest potential strategic changes to the current London Plan PBSA policy. Associate Director, Alice Yau and Director, Catriona Fraser consider the key topics of debate around planning for PBSA in London that the consultation document is exploring.
Since the first formal London-wide policy for student accommodation was introduced under the current London Plan (2021), student numbers in London have continued to soar beyond projections, with planning applications for PBSA increasing and evolving local nuance coming through Local Plans[1].
The key questions the London Plan consultation seeks to address are how to determine need and targets for student housing, how this need should be balanced with conventional housing, and how targets should be applied spatially.
Targets - delivering on need
Currently, the London Plan sets a strategic requirement of 3,500 new student beds annually, without details on how this should be distributed across local authorities. It is clear this target requires revision and the consultation document acknowledges that delivery has not kept pace with the increase in London’s student population. Recent HESA data shows that the target projections from 2018 (on which the current target is based) of c. 350,000 full-time students in London by 2040/2041, has already been exceeded with 542,630 students currently studying at London-based institutions in the 2023/24 academic year.
The current London Plan has sought to link this need to universities and their student recruitment plans through the requirement for nominations agreements. However, the consultation acknowledges the barriers that this can create to delivery, given the changing commercial approach of universities and their appetite for exposure to long-term risk. De-coupling assessment of wider need and requirement from university nominations (through applying this only to affordable student rent units which the university allocates) is considered a positive step towards achieving the target required, and also towards facilitating a greater variety of mechanisms, including direct-let schemes, to meet the changing market requirements. But could this go a step further?
Location, location, location
The consultation also queries whether PBSA targets should be set at a London-wide level (for example, through borough targets or a requirement for site allocations) or indeed left to Local Plans.
Students are a key demographic across London, despite the fact that distribution of student accommodation tends to cluster in certain locations that are well suited for it, such as in close proximity to specific Higher Education Institutions (HEIs) or local centres with good public transport links. However, whilst different areas experience different levels of demand, students are not constrained by borough boundaries, especially where there are good transport links or cycle distances, as they can easily study in one borough but live in another.
As such, student accommodation is a London-wide need that requires strategic oversight. Some local authorities have already taken proactive steps to identify their local need, however it is noted that too local an approach risks some authorities pushing the issue across their boundaries.
In this context, strategic London-wide targets can help to ensure demand is met, but it is important for policy to clarify how these targets will ensure more equitable distribution and that the responsibility for delivering this need does not fall solely on the most proactive boroughs. It remains to be seen whether this will require setting specific targets for individual local boroughs, if that is even possible to calculate, or whether it will involve policy wording noting a requirement for a proactive approach. Regardless, the encouragement of local authorities to consider student accommodation site allocations is seen as a positive step. PBSA can represent an ideal opportunity to optimise brownfield sites in locations that might be unsuitable for traditional residential accommodation, due to factors such as size, neighbouring constraints and ownership. Encouraging local authorities to identify such sites for alternative residential accommodation, such as student, can help increase delivery and brownfield optimisation (in line with the broader aims set out in this consultation, and in the new NPPF) to meet wider housing market needs and take pressure off the private rental market elsewhere.
Balanced communities
Any conversation regarding appropriate locations for student accommodation, however, must consider the need to achieve an appropriate balance with residential homes. How London should achieve this balance, given the acute housing need, is also a key question posed by the consultation.
Published last year, the PBSA London Plan Guidance (2024) encourages co-location of student with residential in the right locations. This co-location can result in a range of placemaking and community benefits, ensuring that areas maintain balanced communities. There are many benefits to co-locating student and residential accommodation, either on the same scheme or nearby, and recent schemes across London have demonstrated this at a variety of levels. Large regeneration schemes have successfully used student development in the early phases of development to help activate new public realm and local economies early on, whilst medium size sites have sought to co-locate to help unlock viability and provide increased provision of affordable residential housing.
The consultation notes that the new London Plan could play a key role in balancing different housing needs by ensuring that student, and other forms of shared housing, contribute to wider affordable housing provision and considers how this might be achieved. This reflects a growing trend among local authorities in London requiring student schemes to deliver increased affordable residential provision, both on-site and off-site through payments in lieu. Allowing greater autonomy for local policies to direct conventional affordable ‘asks’ to different elements of residential is considered to be a clear positive step, offering flexibility for local authorities to address their specific affordable housing requirements and needs.
As the consultation on the new London Plan draws to a close this Sunday, 22 June, it is clear that PBSA has a vital role to play in responding to London’s growing student population. We look forward to seeing the next iteration of the London Plan provide more defined support and policy mechanisms that recognise the benefits that student accommodation can bring to meeting London’s diverse housing needs.
For more information on PBSA provision in London, please get in touch with Alice Yau or Catriona Fraser.
19 June 2025
[1] New report reveals the growing influence of PBSA in London’s housing landscape