[2025] UKUT 00007 (LC)

In the months around the valuation dates and after, the City Council granted several planning permissions for PBSA. Each application was supported by a needs assessment intended to satisfy the requirements of policy TP33. It also granted the four CAADs which are the subject of these appeals by the Secretary of State. As we have already explained, in deciding whether planning permission could reasonably have been expected to be granted for PBSA, we are entitled to have regard to those decisions.

In chronological order, these were as follows.

In April 2017, planning permission was granted for a 6-7 storey PBSA development accommodating 102 bedspaces on the corner of Cheapside and Moseley Road, Digbeth. The development was specifically to cater for students of the South and City College whose permanent residence was outside the city. The experts placed no weight on this small, bespoke application.

In January 2018, planning permission was granted for 290 bedspaces at the ‘Nautical Club’, 3-4 Bishopsgate Street in the Five Ways area of the City centre. The application was supported by a needs assessment by Savills dated October 2017. The officer’s report to the Planning Committee noted that the City’s full time student population had been growing “strongly and consistently” over the past couple of decades and stood at 63,000. Reference was made to 5,582 bed spaces in the pipeline before officers commented:

“Using the 2015/16 student population and assuming that every single bed in the pipeline comes forward, the student to bed ratio will become 2.2 (i.e. 2.2 students per bed space). Although not every student will need accommodation, it is still considered that there is scope for more purpose built student accommodation in the City Centre.”

Two months later, in March 2018, planning permission was granted for 1,023 bedspaces at Vesey Street, another central location close to Aston University. The application was supported by an October 2017 needs survey prepared by wyg. The officer’s report of 1 March saw no reason to disagree with that assessment which suggested that only 50% of the full time students of Aston and BCU would have access to purpose built accommodation and that additional student accommodation was needed. Despite previous approvals on the site for student accommodation, and the presence of other PBSA in the immediate vicinity the officer agreed with “strategic colleagues” that the principle of student accommodation was acceptable in that location.

Also in March 2018 permission was granted for 399 bedspaces at Upper Dean Street in the City centre, a little to the southwest of Eastside. The application included reports on the Birmingham student market prepared by Knight Frank in 2014 and December 2017. The officer’s report for the committee noted that permission had previously been granted for PBSA on the site in 2015, before the Development Plan had been adopted. The updated assessment was said to show an undersupply of PBSA with only 20% of the City’s full time student population being offered PBSA accommodation. The officer advised that the proposal would comply with policy TP33 and was acceptable in principle.

The Nautical Club, Vesey Street and Upper Dean Street planning permissions were all granted before the first of our valuation dates, for BCU’s site, which falls on 16 March 2018, the day after the planning committee meeting approved the Upper Dean Street. In aggregate, 1,712 PBSA bedspaces were consented by BCC in the first three months of 2018.

The following month, planning permission was granted in April 2018 for up to 61 studio apartments over six storeys at 168 Bridge Street West, a location to the north of the City centre, outside the inner ring road. The application was supported by a needs assessment dated September 2017 by ‘Student Tenant Find’, and a CBRE report – ‘Birmingham Student Supply and Demand’. The needs assessment concluded that even after taking account of pipeline PBSA bed spaces approximately 21% of the student population could not be accommodated in PBSA, and that additional accommodation was therefore required. The officer’s report for the 12 April 2018 committee meeting accepted that there remained a current need for PBSA whilst not necessarily accepting the specific figures identified in the needs assessment.

The valuation dates for the Quintain, Curzon Park, and Eastside references fall next in the chronology on 17 July, 30 August, and 26 September 2018.

In October 2018, planning permission was granted for 556 bedspaces at Lancaster Street under reference 2018/08221/PA. We have little detail of this application, which was referred to at paragraph 5.27 of the officer’s report for the BCU CAAD, which we discuss below.

BCC failed to determine Quintain’s CAAD application of 11 February 2019 within the required two-month period, but it did issue a Certificate (‘the purported Quintain CAAD’) on 29 May 2019. Included as AAD were 52,147 sqm of student accommodation, or 1,940 bed spaces, in a development of up to 99,490 sqm. The purported Quintain CAAD is subject to appeal by the Secretary of State.

The officer’s report of 23 May 2019, recommending the grant of the requested certificate, said this:

“9.17

Considering the period after the relevant date (17th July 2018), there have been applications for in excess of 1000 student bed spaces across the City, with one scheme approved in October providing some 556 spaces within the City Centre. Given that the development would likely be a multi-phase scheme progressing over a number of years, coupled with the City’s support of the expansion of the City’s universities (BDP TP36), it is reasonable to assume that significant further expansion of the student residential offer would be required. Eastside is ideally located for two of the City’s key universities and its continued focus as a learning quarter is supported in policy. Therefore, subject to the amenity, design and highway considerations … at the relevant date it is likely that the principle of student residential could have been satisfactorily demonstrated.”

Curzon Park’s application for a CAAD was made on 18 April 2019, resulting in a certificate dated 18 June 2019. This certified that up to 181,260 sqm of mixed-use space would be appropriate alternative development, including 37,013 sqm of PBSA.

The officer’s report of 18 June 2019 was in similar terms to that prepared for the Quintain CAAD.

On 21 December 2018, BCU made an application for a CAAD for its site, in which it sought confirmation that 88,829 sqm of mixed-use development was appropriate alternative development, including 66,187 sqm (2,279 bedspaces) of PBSA. On 31 July 2019 BCC granted the certificate.

The officer’s report dated 18 July 2019 said this:

“9.19

In terms of quantum, the proposal clearly represents a significant number of student bed spaces. To show a need the applicant has submitted evidence to demonstrate rising demand for student accommodation to serve BCU leaving a shortfall in 2020/21. There has been a significant growth in the development of PBSA, particularly in and around Birmingham City Centre. Between 1 April [2018] and 31 March 2019 a total of 1,166 student bedspaces have been completed in the city centre. At April 2019 2,667 bedspaces were under construction and a further 658 bedspaces have planning permission but are not yet started. The existing available supply of student accommodation in the city centre (including this 2018/19 completions) is 13,915 (University and private student accommodation). If all accommodation under construction and not yet started was built out the supply of bedspaces could reach 17,240.

9.20

Furthermore, members will also recall that a positive CAAD was issued for the [Quintain] site confirming that on 17th July 2018 a total of 1,940 bed spaces could reasonably have been expected to gain planning consent on the adjacent site.

9.21

As such, … at the relevant date it is likely that the principle of student residential would have been supported as proposed.”

The Council received more detailed and considered advice from its officers on the application of Policy TP33 in a report to its planning committee dated 21 November 2019. Headed “student accommodation supply and demand”, the report provided relevant background information and clarified the evidence which officers considered was needed to provide ‘an up to date demonstration of the need for any development’.

Mr Williams KC submitted that the advice contained in the November 2019 report properly interpreted and applied Policy TP33 and he invited us to adopt the same approach. He suggested that the report supported the position taken by Mr Hadland on each of the issues which divided the experts. We will consider whether that suggestion is correct when we deal with those issues.

The assessments of demand in the report were taken from the publicly available HESA data for 2017/18. The supply of accommodation was analysed both by reference to the city as a whole and by reference to sub-areas, the largest of which were the city centre and Selly Oak/ Edgbaston. The report’s broad conclusions noted the increase in demand over the previous 10 years and advised that demand was set to increase over the next 5 years if the universities’ future growth plans were implemented. Based on the total number of students requiring accommodation, but without distinguishing between different types of accommodation, and comparing that figure to the total supply of PBSA (existing, under construction and consented) the report concluded that there was an overall deficit of 8,837 PBSA bedspaces in the city. This PBSA deficit, or “residual demand” as the authors described it, was currently being satisfied by other types of accommodation (specifically HMOs, although that was shorthand for rented accommodation which was not PBSA or provided by the universities themselves). Interestingly, the analysis in the paper was expressly predicated on the assumption that all current and future potential demand for student accommodation would be for PBSA rather than for HMOs in the private rented sector. Because there was sufficient accommodation in the City to house all students, any new PBSA would primarily be to serve a growth in student numbers, to rectify a mismatch in the type of accommodation which is available and that which is needed, to respond to changing student preferences or to replace existing PBSA.

The report included an appendix which recommended information which should be provided to demonstrate a need for PBSA. It was suggested that this evidence should be specific both as to the university to be served by a proposed development, the particular subset of students who were to be accommodated and as to area, so evidence about the overall student population or city wider need alone would not be sufficient. This advice may be contrasted with the needs assessments provided to support the applications for PBSA consents to which we have previously referred which were largely based on city-wide needs assessments.

It was emphasised by Mr Pereira KC that the November 2019 report would not have been known to the market at any of the valuation dates, some 14-16 months previously. That is obviously correct, but it does not seem to us to be an obstacle to reliance being placed on it for the purposes suggested by Mr Williams KC. We are not concerned at this stage with market perception, but with the interpretation of policy TP33 and the evidence required to demonstrate the need referred to in its first bullet point. We are in the position of a decision maker at the valuation date asked to determine whether planning permission should be granted for PBSA. An interpretation of its own policy which the planning committee adopted in 2019 might also have been a correct approach at an early date, whether it was applied in decisions made at that earlier date or not. If we are satisfied that it is the correct interpretation of Policy TP33 we should adopt it whether or not it was the approach being taken at around the valuation date.

The City Council failed to determine Eastside’s first CAAD application of 22 February 2019 (for 44,000 sqm including 1,105 student bedspaces) within the required two-month period, Eastside made a second application on 18 November 2019, which sought confirmation that up to 30,143 sqm of mixed use space would be appropriate alternative development. The City Council issued a CAAD on 16 January 2020 for a maximum of 30,747 sqm including 24,870 sqm of student accommodation, or 871 bed spaces. This Certificate is also subject to appeal by the Secretary of State.

The officer’s report of 7 January 2020 was quite categoric in its assessment of the need for PBSA and said this:

“9.6

Considering the period after the relevant date (26th September 2018), consent has been granted for Purpose Built Student Accommodation (PBSA), including a development sited close to the proposals (365 bedspaces, reference 2018/10465/PA). [HESA] data shows that the overall demand for accommodation in Birmingham was 36,218 bedspaces in 2017/18. With the number of students expected to increase over the next 5-10 years there is clearly a demand for student accommodation and given the growing presence of education establishments in the city centre there is a need for PBSA. Eastside is ideally located for two of the City’s key universities and its continued focus as a learning quarter is supported in policy. Therefore, subject to the amenity, design and highway considerations …at the relevant date it is likely that the principle of student residential would have been supported as proposed.”

(The development for 365 bedspaces under reference 2018/10465/PA has not been further referred to in the evidence.)

Clearly in the first half of 2018, the Council was willing to grant permission for PBSA, being satisfied that there was a demonstrable need, and that the requirements in TP33 were being met by evidence of an existing city wide demand for student accommodation coupled with the expectation of growth in the institutions closest to the application site.

The officer’s report granting the Quintain, Curzon and BCU CAADs, in the summer of 2019 can, we think, fairly be taken to indicate how the Council was applying its own policy at the valuation dates in March to August 2018.

Although the November 2019 report was more demanding in terms of the evidence which would be required to support an application for PBSA, it has not been shown to have reduced the Council’s perception of need, which the Eastside CAAD suggests had not changed.

That sets the scene by showing how BCC was treating applications for PBSA between April 2017 and January 2020. We will now consider how the experts assessed the need for PBSA in 2018.