[2025] UKUT 00007 (LC)

One point of difference between Mr Hadland on the one hand and Mr Taylor and Mr Feeney on the other was whether it was appropriate to assess “planning need” for PBSA by reference only to the city centre, or the city as a whole. In determining where our focus should be, we bear in mind the PPG advice to assess needs by reference to the ‘relevant functional area’ (or housing market area) and its observation that establishing the assessment area may identify smaller sub-markets with specific features.

The City Council’s SHLAA identified its total housing need at 89,000 homes – of which it would only be able to provide 51,000 within its boundary over the plan period to 2031. That part of the development plan was city-wide, indeed beyond the city’s boundaries.

Although the development plan defines the centre as one specific area of the city, policy TP33 does not differentiate between areas, it applies across the city. The supporting text explains how PBSA can contribute towards the city’s housing requirements as a whole.

During 2018, the City Council appears to have been content to look only at the broadest picture when considering planning applications for PBSA. At both Upper Dean Street and the Nautical Club it received needs assessments which referred only to the City’s full time student population. We do not read the officer’s report at Vesey Street as endorsing a sub-market assessment; as Mr Elvin submitted in closing, the report simply identifies that there would be sufficient need from the adjoining Aston and BCU.

Although it had previously been satisfied with relatively unfocused evidence of need, the City Council’s planning committee was advised by its officers in November 2019 that consideration should be given to the local area around the university to be served, and that evidence of city wide need alone ought not to be accepted as sufficient. That advice may or may not have been intended as a corrective to previous practice, but in either case we do not read it as suggesting that city wide need was thought to be irrelevant, merely that it would not be sufficient to focus only on the bigger picture. That seems to us to be no more than policy TP33, properly applied, will inevitably require since the first bullet point is concerned with the need for the proposed development, without limit on where that need may come from, while the second focusses on the capacity of the site, in terms of its location, to meet that need. A focus on the city centre, to the exclusion of the wider picture, or vice versa, would therefore be unlikely to address the requirements of the policy as a whole.

It was common ground that the route of the B4215, A456 and A4540 main roads which cut across the city below the centre, forms a relevant boundary zone. To Mr Hadland it appeared that University of Birmingham students were generally accommodated to the south of that line, while students from the three city centre universities were generally housed to the north, although with some overlapping from either side.

Mr Hadland’s experience was that students generally tend to seek PBSA within a maximum 20-minute walk from their place of learning. He produced a plan showing the separation zone, and circles equivalent to the radius of a 20-minute walk, although he said that he had not rigidly applied these to define the boundary of his sub-market. But Mr Taylor’s heat maps demonstrated that around 18% of University of Birmingham (‘UoB’) students) lived beyond a 20-minute walking distance and the agreed supply data included over 1,000 bedspaces at Hamstead Hall and Oscott Gardens which are 80 and 69 minutes’ walk from the BCU campus. Mr Feeney also showed that both UoB and BCU entered into nomination agreements for PBSA beds at further distances – generally around 35-45 minutes’ walk away, but in one case much further. It was therefore understandable that in cross-examination Mr Hadland sought to row back from his original reliance on walking distances as a way of demarcating relevant sub-areas.

We accept Mr Taylor’s evidence that the role of sub-areas within a planning needs assessment is not to carve up the planning need and isolate it to within pre-defined areas so that only developments within those pre-defined areas can be regarded as satisfying it. In applying the PPG, the City Council is required to have regard to the whole of its administrative area, both in policy making and decision-taking. We have no doubt that the whole city forms the functional assessment area for the assessment of general housing need. The assessment of need for PBSA is one aspect of that wider housing need and for the reasons advanced by Mr Taylor it too should be assessed across the city as a whole. As he demonstrated, there is fluidity within the student housing market, with ‘bleed’ across various notional sub-market boundaries. There also exists what he called a dynamic network in which new provision in one location can free up bed spaces within another to meet different needs.

In addition, Mr Hadland’s approach, when considering the issues in the round, produces inconsistencies, in that he considered the demand side from a limited geographic area, but supply from a wider area. That is likely to result in an underestimate of demand.

While these considerations seem to us to militate against too localised an approach to the assessment of need, they cannot diminish the fact that we are dealing with notional applications for specific sites. We have no difficulty in accepting the general proposition that, given a choice, most students are likely to prefer to be accommodated somewhere which is convenient to their place of study. It is clear from the Council’s own November 2019 report that it was advised to have regard both to the citywide picture and to the locality of a particular site. If it could be demonstrated that a need existed in one location which could be satisfied by a site in close proximity to that location, then it might not be necessary to consider any wider need unless there was a suggestion of an oversupply somewhere else. If the need was not concentrated in one area, but was spread across the city, then a judgment might be required about how and where it should best be met. The necessary assessment is less blinkered and more nuanced than some of the evidence acknowledged. In short, we consider that it is likely to be appropriate to have regard both to the need for PBSA in the city as whole and to any specific need in a particular location, and we can see nothing in policy TP33 which rules that out.

It is common ground that a reasonable planning authority applying TP33 would reach a judgment on planning need for PBSA taking into account an estimate of future growth of student demand for PBSA. The only disagreements are over what period and at what rate growth should be accounted for.

Mr Hadland and Mr Taylor came to a similar view that there had been historic growth in student numbers of around 18%, or 3.1% per annum CAGR (compound annual growth rate) between 2016/17 and 2021/22. They both then assumed that growth would continue at the same rate, extrapolating forward, Mr Taylor commenting that this was a conservative estimate which should be considered a minimum.

Mr Taylor projected growth using the previous five and ten year aggregate compound growth rates, although for the whole of the city there was little between the two – 3.10% and 3.08% respectively – with both projecting student numbers at around 101,500 by 2030/31.

Mr Feeney considered these growth estimates to be unrealistically low. By analysing student numbers in the city centre (to compare with those of Mr Hadland), he calculated that the three city centre universities grew total student numbers by 20%, numbers of students from outside the region (and therefore more likely to require PBSA) grew by 25%. His analysed growth figure, based on the licenced data, was 25.7% between 2014/15 and 2021/22.

A number of factors feed into an assessment of growth. There was a general consensus that while at the valuation dates the UK was part way through a ‘demographic dip’ in the population of 18-year-olds, slightly more pronounced in the West Midlands than nationally, and that this was set to continue until the early 2020’s, in fact the number of full-time undergraduates was increasing, both nationally and at the Birmingham universities which have seen a consistent increase in students of just over 3% when the number of 18-year-olds was in decline.

Universities at the higher end of the league tables, for instance UoB and Aston, are thought to be better placed to respond to the population decline. By 2030 the number of 18-year-olds is likely to exceed 750,000, some 15% higher than the number at the valuation dates. We were also referred to the investment that the Birmingham universities were making to their campuses, for instance BCU’s new campus facilities and investment in facilities by UoB, Aston and UCB.

Having regard to this evidence we think it more likely than not that in 2018 it would have been assumed that the future growth of student numbers in Birmingham would be at a higher rate than that seen historically, and in any event we prefer Mr Feeney’s evidence on growth, based on his licenced data. Predicting growth using the historic growth rates as Mr Hadland and Mr Taylor did would underestimate student numbers in the future, and all things being equal, therefore underestimate the need for PBSA (as Mr Taylor warned might be the case).

As regards the period over which growth should be assessed, Mr Hadland allowed for anticipated growth in the demand pool over a period of four years from the valuation dates (five years from the date of the data) because it allowed for a three-year long stop for planning permissions, allowed a reasonable time for PBSA under construction or with consent to become operational at which point such estimates of planning need would become material, and finally because universities consider that any projections beyond a five-year horizon are made with significantly lower confidence. Little if any reliance, he said, was placed on projections over a longer period. In his experience, universities find their own student growth numbers difficult to predict. He noted that as part of the November 2019 planning report, BCC had engaged in consultation with the universities, but he accepted that there was no evidence that the council had access to any forecasts when making its decisions at around the valuation dates.

Mr Taylor considered it appropriate to project growth in student numbers to the end of the local plan period (2031), on the basis that a reasonable planning authority would not confine themselves to what is in effect a four year period. The NPPF requires strategic policies, including TP33, to ‘provide a clear strategy for bringing sufficient land forward, at a sufficient rate, to address objectively assessed needs over the plan period’. Paragraph 60 requires authorities to conduct housing needs assessments for different groups including students (61), and then to assess how those needs can be met over the plan period (65). Paragraph 22 of the NPPF directs that strategic policies should ‘look ahead over a minimum 15 year period from adoption’.

In cross-examination, Mr Hadland accepted that, on the material before us, using the plan period would be a reasonable basis to proceed, and it would be in accordance with government policy. He also accepted that the CAAD schemes (as currently certified), are of a size which would be phased over a number of years and this would suggest the period of growth considered should project beyond a four-year period.

However, the period over which growth is assessed on the demand side of the calculation, must have some regard to the availability of evidence of growth in supply. We take two things from the evidence. First, even without the benefit of hindsight which Mr Feeney referred to, at the valuation dates it cannot sensibly have been thought that all of the pipeline would necessarily be delivered. That would weigh in favour of need for PBSA being under-assessed. But secondly, assessing growth to the end of the plan period based solely on the agreed pipeline – schemes under construction or with planning permission – is likely to under-assess supply, as it assumes no other schemes will come forward during the period, which we consider very unlikely. We will therefore place greater weight on growth in the shorter term, which would have been assumed with more confidence at the valuation date.

“HMOs”

As we have seen, the experts use ‘HMOs’ as a shorthand for all forms of private rented accommodation other than PBSA. In summary, Mr Hadland included all HMOs in his supply calculation, Mr Feeney excluded all, and Mr Taylor took 50% as a conservative estimate of the contribution HMOs make to supply.

Mr Hadland and Mr Taylor both took ‘other rented accommodation’ as calculated in the HESA data as a proxy for HMOs. Mr Hadland, fairly, noted that the data was likely to also include some accommodation that would not fall within the HMO regime, for instance one or two-bedroomed flats, but as he was interested in other housing options available to students, this did not affect his analysis.

In his first report, based on the public HESA data, Mr Hadland calculated that 5,395 students in the city centre were living in ‘other rented accommodation’. This was later revised to 3,265.

Mr Feeney’s evidence was that only 1,470 of the students reporting in the public HESA data that they were in other rented accommodation were living in the city centre – which he considered comprised postcodes B1 – B6. In a subsequent note, Mr Hadland accepted that his figure required adjustment, but thought Mr Feeney’s figure too low. Widening the postcode range, Mr Hadland came to a revised ‘HMO’ figure of 3,812 students.

Mr Taylor noted that the data showed 16,430 students in ‘other rented accommodation’ across the city, which represented 25% of the total student population; and this was the figure quoted in the SHLAA. In the case of UoB, the figure was much higher at 40%.

As we have described in paragraphs 34, 41 and 45 above, the desirability of moving students out of the general private sector into PBSA to increase the overall housing stock is reflected in national policy in the PPG, and in the City Council’s SHLAA, and its Article 4 direction. We are therefore confident that in assessing the need for PBSA, one relevant consideration to which a decision maker should have regard is the beneficial impact which additional high quality student accommodation is likely to have in freeing up other accommodation to meet more general housing needs.

In cross-examination, Mr Hadland accepted a series of propositions put to him by Mr Pereira which in combination forced him to accept that the consequence of applying national policy guidance was that existing HMOs should not be counted as part of existing supply when assessing planning need for PBSA.

We are nevertheless sceptical as to whether all students living in ‘other rented’ accommodation should be included in the assessment of demand for PBSA. Whatever changes in student behaviour planning policy may wish to encourage, PBSA will not suit all students, or their resources, and it is unrealistic to assume a demand for PBSA from all of those who are not living at home.

Notwithstanding the parties’ suggestion that “planning need” should be expressed as a specific figure we are not satisfied that it is either necessary or possible to do so on the evidence we have heard, and we will express our own conclusions in broader numbers. Policy TP33 requires that a need for PBSA be demonstrated by reference to a particular development involving a particular number of bedspaces. To provide that demonstration it is not necessary to quantify the total need for PBSA, whether in the city as a whole or in the city centre. If a need can be demonstrated for at least as much accommodation as the particular proposal is intended to provide, and if the application site is well located to satisfy that need, the extent of any greater need is unlikely to be of much significance. The evidence we have heard has not been focussed on a particular development and addresses the larger question, not the narrower one; nor is the evidence sufficiently robust, or the question sufficiently well formulated, in our judgment, to support definitive figures in the way the experts have sought to do. But it is not necessary for us to be as precise as they have been in order to assess whether there was sufficient need for PBSA to persuade a reasonable planning authority to grant consent for each of the Eastside sites viewed in isolation.

Our starting point is that, as was common ground, the publicly available HESA data is unreliable. We agree with Mr Feeney that it is likely to underestimate demand, for all the reasons rehearsed above, but the most telling of which, in our view, is first that the data would suggest an occupancy rate of only about 73% (16,100 students in 22,082 bed spaces) whereas PBSA occupancy is generally over 90%. Secondly, the public data implied that 18% of international students were living at home, which cannot be correct. In our judgment, inevitably that means that by relying only on the public data Mr Hadland has underestimated demand.

We are satisfied that it would have been assumed in 2018 that future growth would be at a higher rate than that seen in previous years, for the reasons we outlined above. We prefer Mr Feeney’s evidence on growth and think that the growth rate which was largely agreed between Mr Hadland and Mr Taylor is too low – as Mr Taylor thought likely. That would again point to demand being higher than Mr Hadland allowed for.

The period to which growth should be applied is connected, in our view, to how supply is also likely to change – from the pipeline. Whilst it might be permissible in terms of planning policy to project growth through to the end of the plan period in 2031 (as Mr Hadland was persuaded to accept in cross examination) it is not obligatory to do so when considering an application for a specific site. We consider it is illogical to take account of growth over a period which is too long to enable a reliable assessment of likely supply over the same period.

We are concerned with the need for PBSA at the valuation dates, not at some date in the relatively distant future. BCC was prepared to grant planning permission on a number of occasions without growth being quantified in the supporting needs assessments. An expectation of future growth, and future supply, is part of what a reasonable planning authority would take into account in the round, but we are not persuaded that it is necessary or helpful to quantify it over four or ten years into the future.

Putting ourselves in the position of a decision maker considering the need for PBSA on the valuation dates, we are confident that growth in student numbers – whether over four years or longer – at the Birmingham universities would be significant, and higher than in previous years. The substantial shortfall which was demonstrated on current figures would be expected to increase unless sufficient additional PBSA was made available. Those considerations would contribute to demonstrating a need for PBSA.

Mr Feeney assessed PBSA need on five different bases. His first, second and fifth methods were based on the licensed public HESA data, which we consider more reliable than those methods (Mr Hadland’s, Mr Taylor’s and Mr Feeney’s third and fourth versions) which were based on the publicly available data set.

Of his first two methods, it seems to us that comparing 2016/17 demand with supply in the same year is more logical than his second version, which compares demand for that year with supply for 2017/18 without accounting for growth. And for similar reasons we place less weight on Mr Feeney’s fifth method, which accounted for the pipeline supply without accounting for growth in demand.

So, we take Mr Feeney’s shortfall figures of 22,666 for the city as a whole, and 9,649 for the city centre, as our starting points. But we think there is something to Mr Hadland’s observation that some students would be willing to commute from out of the area. Derby, for instance, is a short train ride away, and commutable for an enthusiastic student. That may reduce the need figure, but doing the best we can on the evidence, we consider it would still be at a level in the late teens or around 20,000 for the city, or around 9,000 for the city centre.

Part of that need would continue to be met by HMOs or other forms of privately rented accommodation. But given the size of the shortfall and the contribution made by PBSA to freeing other privately rented accommodation for the wider housing market, we do not consider the availability of HMOs undermines the obvious and substantial need for additional PBSA at the valuation date. A planning need has been demonstrated for far more PBSA than any one of the sites would be capable of accommodating.

That need is made out whichever expert’s evidence is preferred. For example, in the city centre, even if Mr Hadland was correct to include all ‘other rented’ accommodation in his assessment of supply, his revised figure for HMOs of 3,265 bedspaces would result in a shortfall in excess of 5,500 bedspaces. For the city as a whole, even if it is assumed that there is no demand for PBSA from any of the 16,430 students who reported that they were in ‘other rented’ accommodation, a shortfall of more than 3,500 would arise.

Assuming that some of the students accommodated in HMOs would prefer to live in PBSA, thus reducing the ‘other rented’ accommodation, as Mr Taylor did, or removing it entirely as Mr Feeney advocated, would significantly increase the shortfall.

Even if it is assumed that no HMO student should be included in the demand pool for PBSA, which we do not consider a sensible assumption, applying what can be considered a reasonable level of growth of 20% over five years from the valuation dates would result in an additional need in the order of 4,500 bedspaces. In the light of that as a reasonable prediction, the agreed pipeline of 5,394 bedspaces would not be enough to result in a surplus, on either a city centre or city-wide basis, and we are doubtful that all of the pipeline would be built out. As we have said, estimating growth beyond ten years faces the difficulty that and extended pipeline is unknown.

On any view, therefore, we are persuaded that a need has been demonstrated at each of the valuation dates for substantial further PBSA, such that the first bullet point of policy TP33 would not have been problematic for any of the Eastside sites.

That assessment is consistent with the view the City Council took as planning authority: its SHLAA, for instance, assumed a shortfall of 15,000 bedspaces in July 2018, and each of the planning permissions and CAADs it granted was predicated on a substantial need for PBSA. For the reasons we have given we are satisfied that those decisions were consistent with the City Council’s own policy and that the need they identified was real.