The Competition and Markets Authority has raised concern about a Build To Rent deal which it believes could result in reduced competition between providers of student accommodation - and higher fees for students as a result.
The CMA is looking at how the purchase of student accommodation provider Student Roost by international Build To Rent players GIC and Greystar could lead to higher rents and reduced quality housing in Birmingham.
In a statement the watchdog says it’s been looking into the proposed purchase and comments: “The CMA found the acquisition would not lead to competition concerns in most cities because the combined businesses would continue to face sufficient competition from other accommodation providers. But in Birmingham, the CMA found that the combined businesses would not face enough competition across several university campuses, potentially resulting in higher prices and lower quality services for students.”
GIC, Greystar and Student Roost have accepted the acquisition could raise competition concerns in Birmingham and intend to offer remedies to fully address them - The CMA has not so far said what those remedies appear to be.
Provided the proposed remedies address the CMA concerns, the merger will be cleared without further investigation.
Colin Raftery, Senior Mergers Director at the CMA, says: “Aside from fees, rent is the biggest expense students face, and the rising cost of living is putting even more pressure on student budgets. Many university towns and cities are already dealing with a student accommodation shortage, which is why it’s crucial that private providers like those involved in this deal are competing effectively.
“We’re concerned this deal could result in students in Birmingham seeing higher prices or lower quality services. GIC, Greystar, and Student Roost have accepted our concerns and have told us that they plan address them. A solution that fully resolves our concerns will avoid the need for a more in-depth investigation.”
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Traditional student LLs are being forced out of the market with article 4 directions, HMO licensing etc and students are being driven in to purpose built accommodation. This may often be of a better quality but the rents are eye wateringly high & leave individuals prone to isolation with less communal space.
Housing is something students need to look into very carefully before jumping at the offer of that university place, if the area's too expensive for them they need to look at another university in a cheaper area
I agree Andrew. We also need to look at the number of Uni places being offered to students for crazy courses like a Degree in Harry Potter!
This may be the shape of things to come, as BTL landlords leave the sector due to all the reasons we discuss on these pages. And not just for students. Sooner or later (probably too late) someone will wake up and realise what they have done is made things worse for tenants, not better.
Just had the most bonkers couple of weeks in all my years providing student housing. 3 houses snapped up at first viewing, the others taken within another couple of viewings at most. I always meet up with the agents for the first visits as it gives me a chance to cover off any changes that have been made, and also to have a chat to the new intake regarding their year 1 experiences etc.
As Tricia says, student blocks are crazy expensive (£780 per month on campus here in Bournemouth) and a lot of them now getting very tired and falling into disrepair. Also, quite a few landlords have exited the market over the last couple of years and there's been little backfill. One of my current groups dithered over staying, and are now in a huge flap as the house has been reserved by another group and they've realised that their choice is rapidly disappearing.
And we're just in mid-November! This is normally where we're at in April/May.
Interesting times
Article 4 is about making more family homes available.
Do they not understand huge number of those are living for free and getting priority housing, having kids at an alarm rate for the Benefits and child allowance that working couple can’t get and struggle to pay their Mortgage’s have travelling costs, don’t get the discounts on their C/tax (Benefit Tenants get many reductions) and have to pay full Nursery fee while their kids are side by side with benefit subsidised children.
Of Course there’s all the other free bees. So Article 4 is about removing the property from those who are paying and giving it to those who are not.
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