York has enough homes - but not enough are for students

We hear a lot about the housing shortage. Nationally it’s clear that not enough houses are being built to keep up with demand - but how does York stack up?

Just how many houses are there in York?

If you’re just here for a number: 91,505¹, 5% more than 2015.

That’s the number of dwellings there were in the City of York Council area on 31 March 2023, counting shared houses as one.

What’s more useful is looking at rent prices - by the laws of supply and demand, the change in prices gives powerful insight into whether there are enough houses to be rented out.

Since 2015, prices have increased by 25%² - that’s all private sector houses, not just ones for students. It sounds like a lot, and it is a lot from a human scale. That’s several hundred pounds more a month that everyone in the city has got to find from somewhere, whether that’s working extra hours, cutting back on luxuries or diverting money from savings.

Inflation is measured using the Consumer Price Index including owner-occupier housing costs (CPIH)³.

But from the economy’s view, what’s striking is this 25% increase is actually slightly below inflation. Allowing for uncertainty, rents have pretty much matched inflation seen nationwide, and in ‘real terms’, rents haven’t increased at all. In a world where housing is seen as an investment, matching inflation is unavoidable. Besides, York has seemingly been insulated from the heftier rises seen in Cambridge, Manchester, London and Bristol, to name a few examples.

More importantly, this data means that the supply of houses being let has kept pace with changes in demand for places to rent - there are enough houses to rent in the city.

It’s not just the prices that are showing this either. In 2022, the City of York Council commissioned a Housing Needs Assessment⁴ to estimate the number of new homes that need to be built in the city each year, which reported an estimate of 400-550. This is pretty close to the number of new houses an average of 560 per year since 2015.

There are signs across the board that York’s housing market is stable and competitive. Prices are rising, but enough houses are being built to keep up with the number of people living in the city.

What about student houses?

The student market is a totally different beast.

As the city as a whole has built enough new homes, rapid growth in the student population has meant that the city’s housing resources just can’t handle the volume of new people needing somewhere to live.

With student numbers up 33%⁵ but student rooms only up around 15% since 2017⁶, it’s no shock that rents have doubled. Unlike in the rest of the market, this rise is far higher than inflation, and crucially a lot more than student maintenance loans have risen by.

Some of this student growth is attributable to Covid and its effect on A-Level results, but even before the pandemic the two universities were taking on too many students than was sustainable for the city.

Splitting the market

This problem is not just local to York. Many cities have seen their student populations grow in recent years, and so the Government has given councils powers to restrict where students live.

Student typically rent ‘Homes in Multiple Occupation’ (HMOs) - houses that are lived in by 3 or more unrelated people. Not all HMOs are occupied by students (e.g. young professionals) and not all students live in HMOs (think student halls and two-person houses). HMOs are strictly controlled through a licencing regime and through planning policy, to make sure that communities don’t become imbalanced⁷. Family homes need approval to become HMOs, and HMOs need approval to be converted back. The result of this is that effectively the student market has been separated from the main rental market, and this has led to struggles in absorbing such a large increase in demand.

Room data has a large margin of error. Care should be taken when comparing directly with student numbers. Excludes distance learners, students on placement years and students living at home.

York has 4,000 HMOs, and 1,200 of these have 5 or more bedrooms⁸. Using averages from Student House Finder data, this comes out as rooms for around 17,000 students in York. The council believes this has been roughly the same since at least 2018.

The number of rooms in private halls is thought to be around 3,500⁶. Along with the two newest colleges on Campus East, this is the only type of student accommodation that has seen major growth in the last decade, and still less than the number of new bedrooms needed.

As York’s rental market has effectively been split in two — one for students and one for everyone else — the 33% increase in students has led to enormous pressure on what is a relatively small number of houses. This is behind the price volatility we’ve seen and has maintained low standards of upkeep, the key thing HMO licensing is designed to protect.

Spreading the student increase across the whole city would have kept rent much more stable and avoided huge costs for students, although potentially pricing out a small number of local residents. This would be a much better deal for students, allowing them to concentrate on studying rather than working extra hours to pay the rent. What’s clear is that the city needs a more comprehensive approach to housing policy that considers both the needs of students and long-term residents.

Footnotes

1. Table 100, Live Tables on Dwelling Stock, Ministry of Housing, Communities and Local Government: https://www.gov.uk/government/statistical-data-sets/live-tables-on-dwelling-stock-including-vacants ↩

2. Price Index of Private Rents, Office for National Statistics: https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/priceindexofprivaterentsukmonthlypricestatistics ↩

3. Inflation and Price Indices, Office for National Statistics: https://www.ons.gov.uk/economy/inflationandpriceindices ↩

4. Table 3.8, Housing Needs Assessment, Iceni Projects/City of York Council: https://www.york.gov.uk/downloads/file/8270/ex-cyc-92-local-housing-needs-assessment-by-iceni-july-2022 ↩

5. Where do HE students study?, Higher Education Statistics Agency: https://www.hesa.ac.uk/data-and-analysis/students/where-study ↩

6. Planning Applications, City of York Council: https://planningaccess.york.gov.uk ↩ ↩²

7. Distribution of Houses in Multiple Occupation, City of York Council: https://www.york.gov.uk/ControllingHMOConcentration ↩

8. Local Authority Housing Statistics, Ministry of Housing, Communities and Local Government: https://www.gov.uk/government/collections/local-authority-housing-data ↩