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Studying a Niche Market:

UK Students and the Private
Rented Sector
Julie Rugg , David Rhodes & Anwen Jones
Published online: 14 Jul 2010.

To cite this article: Julie Rugg , David Rhodes & Anwen Jones (2002) Studying a Niche
Market: UK Students and the Private Rented Sector, Housing Studies, 17:2, 289-303,
DOI: 10.1080/02673030220123234

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 Housing Studies, Vol. 17, No. 2, 289–303, 2002

Studying a Niche Market: UK Students and the Private

Rented Sector

JULIE RUGG, DAVID RHODES & ANWEN JONES

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Centre for Housing Policy, University of York, York UK

[Paper Žrst received July 2001; in Žnal form October 2001]

ABSTRACT Renting privately is a minority tenure in the UK, but the sector is
recognised as being essential to the smooth operation of the wider housing market. The
need to target policy effectively has led to an increasing stress on the importance of
understanding how local private rental markets operate. Using a number of local case
study areas from throughout the country, this paper explores the nature of demand for
private rented housing from students. This niche market is a substantial and growing
feature of the private rented sector. The paper demonstrates that although student
demand shares a number of common characteristics throughout the UK, its localised
impacts can vary. Both qualitative and quantitative methods are required to gain an
understanding of how student demand affects all aspects of the local housing market, and
it is concluded that greater attention needs to be paid to exploring ways of understand-
ing the dynamics of rental market development.

KEY WORDS: renting, students, localities

Introduction
Renting privately is a minority option in the UK, accommodating 12 per cent of
the population, but the varied roles played by the sector make it a vital
component of an effective housing market. It has long been acknowledged that
the private rented sector (PRS) is made up of a number of sub-markets, and
policy has been framed accordingly. For example, more intensive multi-occu-
pation PRS housing has attracted speciŽc legislation to protect tenants who may
be subject to enhanced Žre risks; a reputation of poor quality standards and
management in this sub-sector has also led to the development of licensing
regulations speciŽcally for houses in multiple occupation (HMOs). In addition,
an appreciation of the local as well as sub-sector characteristics of the private
rental market are increasingly being viewed as central to both policy implemen-
tation and its evaluation. In its overview of projected housing policy, published
in 2000, the Labour government expressed an understanding that policy im-
plementation for the PRS was likely to have differential impacts depending on
the sector’s local characteristics. For example, attempting to improve property
standards through reform of housing beneŽt would be more likely to work in
areas where demand for rental property was low, and housing beneŽt recipients
0267-303 7 Print/1466-181 0 On-line/02/020289–15 Ó 2002 Taylor & Francis Ltd
DOI: 10.1080/0267303022012323 4
 290 Julie Rugg et al.

better able to respond to incentives to leave poor quality properties and access
better accommodation (DETR/DSS, 2000). Earlier research reected a similar
concern: a 1998 study of the housing beneŽt single room rent (SRR) requirement,
that restricts payments to under-25s, concluded that the impact of the regulation
on young people largely depended on landlords’ ability to let to alternative
groups within a given locality. Where demand was buoyant, the market disad-
vantage of young people was likely to be exacerbated: landlords were able to
bypass the difŽculties presented by the SRR by ceasing to let to young people
altogether (Kemp & Rugg, 1998). Similarly, a study of the economic implications
of temporary use of privately rented accommodation by local authorities to
house homeless families concluded that the way in which the schemes in its
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sample operated depended very much on the state of the local rental market
(Giles et al., 1997).
Despite the importance of understanding the diverse nature of geographically
and demand-deŽned PRS markets, research of this kind has been limited and
sporadic. Demand for private rental accommodation from students is used in
this paper as a means of exploring the way in which the PRS operates at a local
level, by deŽning landlords’ response to a speciŽc demand group and examining
its impact on the wider housing market. The paper is based on a multi-method
study of the impact of student demand on local housing markets that was
completed in August 2000; Žndings are reported in detail in Rugg et al., 2000.
Following a short section setting out the basic context relating both to the
demand for PRS accommodation and student housing, this paper characterises
student demand for private rented property and its location variability. The next
section of the paper examines the implications of such demand on local rental
markets with respect to the issue of competition for property. A Žnal section
reects on methods used to examine local markets.

Background
In the UK, private renters are very much a minority in a housing market that is
dominated by owner occupation. In the past the private rented sector has been
associated with a speciŽc number of demand groups (Bovaird et al., 1985),
although more recently demographic and economic factors has led to a widen-
ing of experience of the PRS (Kemp & Keoghan, 2001). Many households’
housing biographies are now likely to include at least a short spell renting from
a private landlord. In general terms, it is possible to list a number of demand
groups for private renting, based on the circumstances in which the household
is renting:

· ‘life-stage’ uses: young people leaving home for the Žrst time (Rugg, 1999);
and young professionals sharing property before entering owner occupation
(Heath & Kenyon, 2000; Oakes & McKee, 1997);
· short-term emergency use: households experiencing relationship breakdown
(Holmans, 2000), needing accommodation whilst house purchase is being
arranged (Kemp & Keoghan, 2001), or following mortgage repossession
(Nettleton et al., 1999);
· ‘residual’ uses: households on low incomes and not in priority categories for
social housing, such as single, particularly young, people (Kemp & Rugg,
1998);
 UK Students and the Private Rented Sector 291

· households with a preference for renting (Kenyon & Heath, 2001);

· ethnic minority families with a preference for private renting over social
renting, partially because of experiences of harassment on social housing
estates and the limited availability of social housing properties of sufŽcient
size (Bowes et al., 1997); and
· older renters may have been in the sector, living in the same property, for
decades, and may have never considered any alternative (Bovaird et al., 1985).

Each of these types of renter utilises the sector in different ways, and extensive
study needs to take place in terms of understanding how the market responds
in each case. One further substantial demand group is students, which is a group
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particularly amenable to a study of this nature since its population is easy to

deŽne and characterise. HEIs carry statistical information on their students, and
being related to a given institution means that structures are in place to facilitate
surveying the student body en masse. By contrast, other renting groups are often
more difŽcult to pinpoint, and are perhaps best approached using omnibus
survey methods.
Over the last 40 years, and in line with the majority of industrialised countries
in the post-war period, the UK has seen a consistent growth in student numbers.
The increase was particularly marked in the 1990s. As recommended in a
government White Paper of 1991, many polytechnics were granted university
status and encouragement was given to expand student numbers (DES, 1991).
The National Committee of Inquiry into Higher Education (1997), known as the
Dearing Report, noted that in 1995–96 the student population was 1.6 million,
and predicted that demand for higher education was likely to push that Žgure
further upwards. Average growth of HEI student numbers over the period
1988/89–1998/99 was 138 per cent, with expansion being most marked both in
colleges principally serving a local demand and the new universities (Rugg et al.,
2000).
Despite the massive growth of this demand group, there has been a limited
commitment to the issue of student housing in academic literature. For the most
part, published studies on student housing fall into three categories. HEIs and
the rationale underpinning the provision of accommodation have been subject to
spasmodic review, including reports by Brothers & Hatch (1971), Hapgood
(1975), Morgan & McDowell (1979) and Blakey (1994). These reports trace a
changing policy agenda that has over time shifted away from a principally
paternalistic view of university halls as a nurturing environment, to one in
which the provision of halls was more likely to be driven by consciousness of
competition between HEIs for students. Charging reasonable market rents and
offering good facilities is seen to constitute a market advantage in student
recruitment terms (Blakey, 1994). Other studies of student housing have largely
been driven by welfare issues. A number of housing reports have concentrated
on Žndings relating to student debt and PRS rents and poor conditions (General
Consumer Council, 1996; Humphrey & McCarthy, 1997; Page, 1998; Christie et
al., 2001). A study by Cameron et al. (1988) has considered the relationship
between the rent charged to students and the formality of tenancy agreements.
More central to the concerns of this paper has been a third stream of research
that has related student housing demand to speciŽc markets. Principal surveys
in this area include research in Brighton, completed by McDowell and published
in 1978; and a study by Groves et al. (1999) that examined the impact of student
 292 Julie Rugg et al.

demand in Selly Oak, Birmingham. Both these studies will be addressed in

greater detail later in this paper. This paper comprises a contribution to the third
stream of literature, in mapping the characteristics of student housing demand
and exploring its wider impact.

Characteristics of the Student Housing Market

Within the PRS, the student housing market comprises what might be termed ‘a
niche market’. Generally speaking, a niche market is one in which supply has
become adapted to meet the needs of a speciŽc, specialised group, and displays
a reluctance to meet demand from another source. The existence of a student
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housing niche market has long been recognised as a feature of the sector: for
example, Carver & Martin (1987) delineated the characteristics of the student
sector in Manchester in 1987; and Nicholson & Wasoff (1989) completed a similar
study for Edinburgh. Both are cities with a high student population. The student
niche market has particular characteristics in terms of its intensive concentration,
property type, the incidence of HEI intervention, the type of landlord and the
resilience of the market. These factors mean that letting to a student household
is materially different from letting to other types of tenant. The following
analysis is based on work completed in nine locations: Belfast, Cardiff, Islington,
Kingston-upon-Thames, Lincoln, Middlesbrough, St Andrews, Tower Hamlets
and York. These locations are not statistically representative of the UK experi-
ence of student renting in the PRS. Rather, they were chosen to reect a variety
of student housing circumstances. Table 1 summarises basic information on each
location.

Intensive Concentration
Student demand for accommodation in the private rented sector is often high,
and can be intensely localised. On average, in 1998–89 each HEI had over 2800
students in the PRS. Generally speaking, students tended to want to live close
to their place of education in order to minimise travel costs. This concentration
was particularly the case where the HEI was well established. For example in
Belfast, most of the students in the PRS lived as shared households in an area
of approximately one square mile close to one of the HEIs, just to the south of
the city centre. The area attracts students from three HEIs and a further
institution located out of the city. Some estimates put the proportion of students
living there at more than half of all households, and some streets in the area
were considered to be almost totally comprised of student households. In
Cardiff, two of the city’s four HEIs are located close to the city centre in an area
in which an estimated 90 per cent of the properties were student lets. In almost
all case study locations there was a marked unwillingness for students to live in
‘non-student’ areas.
This situation was exacerbated to some degree by HEIs running head tenancy
schemes, whereby properties were leased by the HEI from private landlords and
then sublet to students. Generally, success of the schemes with students de-
pended on the properties being located in favoured ‘student’ parts of town. The
concentration of student demand to speciŽc locations meant that, to some
degree, the market tended to perpetuate itself. The clear geographic deŽnition of
the student market means that landlords seeking to make an investment in
 UK Students and the Private Rented Sector 293

Table 1. Case study locations: summary details

Estimated
Estimated proportion of
Location Number number of students in the
(estimated population in brackets *) of HEIs students** PRS**

Belfast: administrative centre of Northern 3 12 727 57

Ireland, with a housing market subject to
sectarian divides (300 000)
Cardiff: administrative centre of Wales, 4 25 291 55
traditional student city, housing the Welsh
Assembly (300 000)
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Islington: London borough, high demand 2 17 728 50

particularly for luxury lettings (176 000)
Kingston-upon-Thames: desirable area of 1 not available not available
London, high demand for property in all
tenures (148 000)
Lincoln: market town in rural area, site of a 1 3300 58
university relocation and so subject to sudden
student inux (83 000)
Middlesbrough: low-demand area subject to 2 not available not available
voids in all tenures (145 000)
St Andrews: centuries-old student city located 1 3000 33
in a rural area and also subject to demand from
holiday-makers (16 000)
Tower Hamlets: inner-London borough 1 7606 47
(180 000)
York: tourist city with growing inux of large 4 11 073 32
companies relocating from London (178 000)

Notes: * Figure acquired from local councils. ** Numbers taken from survey returns from HEIs, and are
approximate.

student housing often Žnd it easy to pinpoint the most appropriate locations in
which to buy property. Where pressure for student accommodation is becoming
acute, it is more likely that properties in those areas that come onto the
owner-occupied market will be bought by student market landlords.

Property Type
Another aspect of the student housing market is the ability of student house-
holds to adapt to any type of property, with perhaps the only requirement being
that it is furnished and capable of being shared by two or more students. Only
a very small proportion of students prefer or can afford to live in single-person
accommodation, such as bedsits or one-bed ats. The property type and typical
student household size varied between and within the case study areas depend-
ing on what was available. For example, in one area, students tended to live in
two- and three bedroomed terraced housing; in another, mixed use of terraced
houses, ats and 1960s maisonettes proliferated; and in a third the students often
lived in ats in converted houses in the town centre. The exibility of student
 294 Julie Rugg et al.

households places them at an advantage when compared with some other

household types that may have more exact speciŽcations. McDowall compared
student household sizes with the size of families on the Brighton Council
waiting list for social housing, and found that the students were in a fairly even
spread of dwelling sizes, whereas 80 per cent of the waiting list families wanted
two- or three-bedroomed properties (McDowall, 1978). Such households may
also have other requirements, such as a garden for their children, or properties
that are easily accessible with a pram, or a location in the catchment area of a
good school. By contrast with all these groups, student households can be any
size, and will have limited specialised requirements.
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HEI Intervention
A further advantage experienced by many students is that their HEI takes an
active role in supporting their move into private renting. Access to assistance is
not entirely unique to students. People on low incomes can often gain help
through rental deposit schemes, rent in advance schemes and accommodation
registers, the development of which has been encouraged by the availability of
government funding (Rugg, 1996). Although these schemes have proliferated,
their availability is still not uniform throughout the UK. By contrast the majority
of students had ready access to assistance either through their student union or
the HEI accommodation ofŽce. Across the UK, the majority of institutions
provided a range of services, the most common being accommodation lists (84
per cent) and lists of letting agents (61 per cent), lists of approved landlords (37
per cent), and tenancy advice services (73 per cent). All these types of help give
students a market advantage compared with other tenants.

Student Market Landlords

A further characteristic of the student niche market is the nature of student
market landlordism. Many landlords letting to students bought property with
the speciŽc intention of letting to that group, and had begun letting in the
previous Žve to 10 years. A number of these respondents said that they had been
encouraged to buy properties to let in response to growing student numbers,
and after reading about the high returns student lets offered. The Buy-to-Let
Scheme, a government-endorsed initiative that offers mortgage-type loans for
landlords, had made entry into the market easier. Landlords who had bought
property speciŽcally to let to students had invested in housing in the popular
student areas and often approached the higher education institution for advice,
for example on the preferred household size, the required standard for student
properties and the average student rent. On the other hand, some landlords had
‘become’ student market landlords by default since they had acquired property
that simply happened to be in a location dominated by student demand. As one
letting agent commented in Cardiff: “Landlords pigeonhole themselves really
with the type of property they offer and where they are located.”
For the most part, the landlords letting to students run counter to the general
pattern of landlord preference. Research on the PRS as a whole indicates that just
4 per cent of all English landlords most preferred letting to students, and that 24
per cent least preferred to have students as tenants (Crook & Kemp, 1996).
However, many of the landlords with a preference for letting to students saw
 UK Students and the Private Rented Sector 295

substantial advantages in doing so, and had letting practices that were
speciŽcally modelled to student tenants. McDowall’s study recognised the
economic advantages enjoyed by landlords letting to students (McDowell, 1978),
which is a situation that has not changed: students are in the position of being
able jointly to pay a higher rent than one that would normally be affordable to
a single household. Even landlords who had problems with students considered
that this was something that they were willing to tolerate, as one agent in
Lincoln explained:
They are a pain but the landlords like the money, £300 for a house [in
single occupancy let] but nearly £500 from students [in multiple occu-
pancy]. They are very demanding as they are used to having everything
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done for them, they are dirty and never look after the gar-
den … Landlords take them on purely for the income.
Although a high rental yield was a main advantage to letting to students, other
factors were also mentioned: demand from students was thought to be steady;
HEIs could be expected to advertise the property, and to deal with problems
relating to individual students; and there were few repossession problems as
students usually left after one or two years.
There is evidence of some diversity within student landlordism. Two types of
student market landlord were operating in the case study areas: what might be
termed the ‘traditional’ student market landlord, and the ‘entrepreneur’ land-
lord. The traditional student market landlord operated on a small scale, and may
have been in the sector for some time. Indeed, HEI interviewees often com-
mented that certain addresses had been used by students year after year. An
estimated 69 per cent of student market landlords generally held property
portfolios of just one letting. This Žgure can be compared to a general survey of
landlords, taking place in 1996, which found that 26 per cent of landlords had
one property only (Crook & Kemp, 1996). Thus, even within a market character-
ised by small-scale operation, small-scale landlords are over-represented in the
student niche market. By contrast, the ‘entrepreneur’ landlord was much more
likely to have a large number of properties, speciŽcally let to students, and be
operating in more than one location. The entrepreneur student landlord may
have a shop-front letting agent to facilitate ease of student use, and the
shops would be located either within or close to the main student letting area in
a given town. Many of these landlords have become established recently in
order to capitalise on growing student demand, and their operation was evident
in Cardiff and Lincoln, and has also been noted in Birmingham (Groves et al.,
2000).
Depending on the nature of the local rental market, both types of student
market landlord operated lettings practices that were tailored to meet student
demand. In particular, tenancy agreements might be offered that took the long
vacation into account. In St Andrews, for example, tenancy agreements were for
nine months only. In other areas, they could be for 10 months, or students might
be required to pay just half the rent during the summer months. Landlords
tended to set rents that took limited student incomes into account. In Middles-
brough, generally low demand for properties meant that landlords were partic-
ularly favourable to students: rents were very low, as little as £20 per student per
week, and retainer fees were often not charged over the summer months. In
some instances, the preference for students precluded letting to other groups.
 296 Julie Rugg et al.

Market Resilience
The niche market for students is particularly robust. During the 1970s and 1980s,
fears were expressed about the long-term decline of the private rented market,
but it was generally thought that properties were still available for students. For
example, Carver & Martin’s Manchester study noted that the high rate of rental
return on student properties had shielded that market sector from general
decline: indeed, growth was evident in the student rented sector (Carver &
Martin, 1987). Continued resilience was evident through the 1990s. Student
increases during this decade were met by landlords moving into the established
student housing areas to invest in property to let. This adaptabiliy was certainly
the case in Belfast and York. A local authority ofŽcer in York commented:
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“Landlords are exible and can respond to the market: if there were an article
in the paper about students Žnding it difŽcult to Žnd places to rent, there would
be an inux of new lettings as landlords responded to the shortage”. Indeed,
some HEI ofŽcers were conŽdent that they could take some residences out of use
for the purposes of redevelopment because the PRS would readily accommodate
an increased demand.
One consequence of the rush to supply properties in the student locations in
some cities is the incidence of oversupply. Indeed, in 1999–2000, 21 per cent of
accommodation ofŽcers indicated that there was in fact a surplus of private
rented accommodation in their locality. In Lincoln, heavy investment in property
to let had resulted from the movement to the city of the University of Lincoln
and Humberside. However, the university was coming to a town in which there
was low housing demand and hence property supply was already good. In
addition, many students were able to commute to the city and continue living
at home. The activity of large-scale property developers, some of whom had
come from Hull, further exacerbated the situation. Over-supply was also evident
in Cardiff, where again larger landlords had saturated the student market, and
difŽculties with letting property were becoming evident.

Variation in the Niche Market

The student niche market can be therefore characterised by a range of features.
However, these elements can fracture and dissipate if the general rental market
is itself under pressure. For example in London, where demand for property in
some parts can be extremely intense, the characteristics of student renting were
dissimilar to experiences in other areas in the UK. In the capital, the student
population was more likely to be dispersed. It was more common for the
students studying in the London boroughs of Islington and Kingston-upon-
Thames, where property prices and rents were very high, to live in neighbouring
boroughs or even further aŽeld in cheaper accommodation, but with good access
by underground rail. Tenancy agreements tended to be assured shortholds for
12 months, and there was little evidence that landlords were charging rents that
took low student incomes into account, as was the case in some of the other
areas. Indeed, landlords tended to prefer letting to young professionals, and the
market was developing in favour of this demand group. Where demand for
property was high, students could be placed at a disadvantage. In addition to
high deposits and rent in advance, some landlords and letting agents required
a letter from the HEI conŽrming that the prospective tenant was a student, and
a letter from parents guaranteeing the rent payment.
 UK Students and the Private Rented Sector 297

Local Impacts of Student Demand in the PRS

Although studies have highlighted one or more of the elements discussed above
as being typical of the student rental market, there has been only limited
research on the local impact of this market’s development. Student demand can
lead to substantial changes to the nature of a particular location: areas become
student ‘ghettos’, and drive up local house prices since property becomes subject
to competition between landlords seeking property to let and so the proportion
of owner occupiers declines (Groves et al., 2000). A further issue is the incidence
of competition for property amongst renters. One of the key complaints relating
to student demand is that it “monopolises the rental sector” (Peacocke, 1999,
p. 41), reducing supply to other tenant groups. In particular, it is often observed
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that students crowd-out low income households that are reliant on housing
beneŽt for assistance to pay the rent. Case study material indicated that this
issue is a much more complex one than a simple account of winners and losers
in the competition for property. The need for a more subtle assessment is
dictated by two factors in particular: Žrst, rental markets are not static and
develop over time; and second the relative strengths of a range of niche markets
within the sector cannot always be predicted.

Market Development over Time

There have been few recent studies of local markets that focus on the way that
the markets have developed over time in terms of the principal tenant groups,
the types of properties available, and the geographic location of both supply and
demand. The research by Groves et al. (1999) constitutes one exception, in
showing how increasing student demand for property in the Selly Oak area of
Birmingham during the 1990s has slowly transformed the local rental market.
Student demand has a differential impact on markets depending on their stage
of development, and this section therefore considers the four types of market
that were identiŽed in the research. These are a steady market that had
experienced little change in recent years, a market currently subject to ux, a
pressurised market, and a market experiencing low demand.

A steady market. For the most part, St Andrews is a good example of a steady
market where no substantial changes have taken place, perhaps for decades. The
issue of competition is to some degree irrelevant, since to a large extent the battle
has been fought some time ago. In St Andrews it has long been accepted that the
city-centre rented properties are the domain of student households, and that
other tenant groups rent elsewhere: young professionals rent properties further
out of town; and people in receipt of housing beneŽt tend to rent outside St
Andrews altogether, in the surrounding villages. Landlords and letting agents
reported that few non-students bothered applying for properties with a more
central location, because the prices were not affordable by single households.
The concentration of young professionals, who might have been able to form
shared households, was not sufŽciently high to constitute a substantial demand
group and so compete with student households; and in any case, landlords and
letting agents favour students because the term times dovetail well with the golf
season, the city’s principal attraction, and holiday lets.
 298 Julie Rugg et al.

Market subject to ux. Perhaps the most obvious market subject to ux in the case
study selection is Lincoln. In 1996, the University of Lincoln and Humberside
moved its principal departments from Hull and Grimsby to Lincoln. The move
suddenly introduced demand for student housing in a location with only limited
experience of meeting student need: approximately 500 students from an exist-
ing HEI in the city have generally required accommodation in the PRS. The new
university has brought over 1000 additional students into the market. However,
on the issue of competition for properties it was reported that there were no
non-student tenant groups experiencing difŽculties with the supply of proper-
ties to rent, since the market had previously been subject to low demand.
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Pressurised market. This situation contrasts with that of a pressurised market.

Here, the principal example is the London Borough of Islington, where demand
for accommodation comes from all tenant types. Although an intensive concen-
tration of student residence is evident in the north of the borough, this niche
market is subject to considerable threat from the gentriŽcation of the borough
spreading upwards from the south. The market is rapidly developing to favour
working professionals wanting to rent higher quality properties, and landlords
are taking over properties for development to meet that market. It is anticipated
that this trend will begin to impinge on the areas traditionally dominated by
student lets. It was observed that housing beneŽt clients had already to a large
degree been squeezed out of the borough, and that students were in a
comparatively weak position with respect to competition from working people.
Students are increasingly looking for properties in locations out of the borough.
So, although demand for student accommodation is high in the north of
Islington, with students from a number of HEIs seeking properties to rent there,
the student market is unlikely to develop to meet that demand, and in all
probability is likely to contract as other stronger niche markets expand north-
wards.

Low demand market. Middlesbrough can be characterised as a low demand

market. Owner occupation has tended to move towards the edge of town;
landlords have bought up properties at relatively low prices in the town centre,
which has led to an over-supply. To some degree, this situation has been
worsened by the decreasing numbers of students coming to Middlesbrough
from outside the locality. A consequence of the low demand for housing is that
there is little competition for property amongst different tenant groups. Al-
though landlords favour letting to students, and offer markedly advantageous
terms, for example including satellite TV and low rents, any tenant is welcome.
Thus, in the centre of Middlesbrough, lettings to households on housing beneŽt
are commonplace in the same areas as student lets.

Other Niche Markets

Adding further complication to the image of the private rented sector as an
entity in constant development is the operation of a number of other, non-stu-
dent niche markets. Students are not the only specialised market within the PRS:
the research found differential renting practices for young professional sharers
and low-income households. The development of a niche market depends on a
number of factors, including substantial demand, landlords’ sometimes personal
 UK Students and the Private Rented Sector 299

letting preferences and property location and type. As landlords and letting
agents enter the market they may be exible about who they take; as time goes
on, however, they are more likely to focus on the market that they Žnd most
lucrative and most suitable to the types of property they have on offer. Small
landlords are perhaps less likely to be exible than the larger ones, and tend to
stay more loyal to a particular market once they understand how it operates.
This trend was certainly evident with the student market landlords. Over time,
the markets can become less exible, the niche markets become more well
established, and competition between tenants diminishes. One York respondent
noted of the city:
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The biggest demand groups are young professionals or couples, stu-

dents and housing beneŽt claimants but there are clearly deŽned
sub-markets with little or no cross-over, therefore no direct competition
between the three groups. The property types suitable for one group
are not suitable for others, the areas they want to live in are different,
there are geographical as well as property niches.

Certainly in many of the case study areas there was often a degree of geographic
demarcation, with some non-student groups living in distinctive areas. The
young professionals were generally able to pay higher rents and sought better
quality properties, often in locations slightly further away from the city centre
than the student areas, as was the case in Cardiff and Belfast. In Islington, the
professionals’ market is located in an area which tends to have decent quality
housing with rents that are too expensive for most shared student households.
A further, and even more expensive, luxury market is evident in the very south
of the borough, which tends to be characterised by well-paid professional and
international company lettings. Although rents in the London borough of Tower
Hamlets were generally cheap for the capital, a similar tendancy to shift towards
the upper end of the market was also evident, as was exempliŽed by a dockside
development of luxury ats.
Households reliant on housing beneŽt also tended to live in speciŽc areas. In
Lincoln, the low-income PRS households were more likely to be located in the
east and west of the city; in Belfast, this tenant group lived to the north of the
city centre. The location could depend to a large degree on property type, and
the incidence of dwellings in the area that Žtted particular criteria. As one letting
agent in Cardiff commented: “If it’s a bedsit then it’s going to be HB [that is, a
household on housing beneŽt]”. There were few areas in which housing beneŽt
claimants and students were likely to be living in similar areas. Middlesbrough
was one exception because of accommodation over-supply. Extreme high de-
mand in areas of London provoked a similar tendency: in the north of Islington
both tenant groups were evident, living in multi-occupancy properties. In
London it was more likely that the housing beneŽt tenants were in a position to
compete with students for property at the bottom end of the market. Landlords
and letting agents based in London were uniform in their dislike of housing
beneŽt claimants as tenants, largely because of delays in the processing of
housing beneŽt. However, both Islington and Kingston-upon-Thames councils
had introduced schemes that utilised PRS properties to house homeless families
and refugees. The schemes had, to some extent, strengthened competition from
households reliant on housing beneŽt.
 300 Julie Rugg et al.

Researching Local Rental Markets

Comparison of different locations shows that student demand within the private
rented sector may not always have the same consequences. The study of student
housing highlights the importance of an understanding of local market variation,
particularly in the formulation of policy for the sector and in policy evaluation.
Achieving that understanding is perhaps more complex than would Žrst appear.
Certainly a range of data is available that illustrates aspects of the sector: for
example, the Census, Rent OfŽcer Statistics, and the spread of information
available through such sources as DataSpring at the University of Cambridge. In
addition, published studies of one-off surveys and secondary analysis has, for
example, characterised families on social housing waiting lists, that are currently
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living in the PRS (McDowell, 1978); used analysis of the electoral register to map
changes in occupancy type, by distinguishing shared from family housing by the
incidence of electors with different surnames (Groves et al., 2000); completed
large-scale surveys of landlords (Crook & Kemp, 1996) and tenants (McConaghy
et al., 2000); and has charted household movements in and out of the sector
(Kemp & Keoghan, 2001).
However, to produce a detailed localised picture, these type of data need to
be combined with material from a range of less easily-accessibly qualitative
sources, such as interviews with rent ofŽcers, landlords and letting agents,
residents’ representatives, housing beneŽt ofŽcers, and environmental health
ofŽcers, in which respondents may be encouraged to use maps as part of the
discussion. Valuable information, for example, on the accessibility of certain
types of accommodation by speciŽc demand groups in the PRS, would be
available from renters themselves, elicited through door-to-door contact by
recruiting agencies or through ‘stakeholder’ institutions such as housing beneŽt
ofŽces, voluntary sector rental deposit schemes and HEIs.
It is possible that some of this data may begin to be collated in a regular
fashion by local authorities: the housing Green Paper, 2000, encourages author-
ities to draw together material on all housing sectors in order to arrive at a broad
basis for local housing strategies. Indeed, the DETR had begun a process of
auditing the readily available information that could inform the production of
local housing market portraits (Burrows, 2001). Exploration is already taking
place of good local authority practice in this area (Blackaby, 2000), but this
process is at only very preliminary stages, and tends to overlook the importance
of qualitative approaches which can be time-consuming and resource-heavy.
The student housing study provides a case in point. Although the research
included a UK-wide survey of HEI accommodation ofŽcers, a broad range of
qualitative interviews were also completed to arrive at less easily obtainable but
key variables that were found to be central to an understanding of how the
student sub-market operated. In each of the 20 HEIs included in the research, the
accommodation policy ofŽcers were questioned in detail about the policies
underpinning HEI provision of accommodation and whether these had changed
over time. Principles informing rent levels were also explored, with an emphasis
on establishing how far the nature of the local rental market had informed HEI
policy. Student welfare ofŽcers were asked more speciŽc questions about the
local PRS with respect to location, property type, landlord type and rents. These
interviews tapped into working knowledge of the PRS as viewed from a very
speciŽc perspective, and illustrated the particular nature of student demand for
rented accommodation.
 UK Students and the Private Rented Sector 301

In addition, in the case study areas, interviews were also completed with local
authority ofŽcers with expert understandings of the private rented sector. Local
authorities are permitted to institute a registration or notiŽcation scheme for
HMOs, and as a consequence environmental health ofŽcers have detailed
knowledge of this type of housing in their area, and were therefore interviewed.
Housing beneŽt ofŽcers were asked about the location of properties that tended
to be let to housing beneŽt recipients, and competition for properties in the
shared part of the sector. Rent ofŽcers, who collate private rented market
information as part of their task of establishing reference rents for housing
beneŽt purposes, were interviewed as a means of gathering information on
property types, local rents, and the existence of niche markets. The statutory
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ofŽcer interview material was drawn together to ‘map’ current and changing
elements of each case study PRS, in order to contextualise the qualitative and
quantitative HEI data.
Finally, interviews also took place with landlords and letting agents in six of
the case study areas. The respondents were selected at random from a variety of
sources including university accommodation lists, local authority private sector
lists, the Yellow Pages and local newspapers. A total of 43 interviews explored
landlord and letting agents’ letting histories with respect to any movement
within different sub-markets, and any speciŽc policies that were pursued with
respect to dealing with one demand group compared with another. In addition
to gathering information on the particular nature of letting to students, these
interviews also allowed some exploration of the dynamics of the market, with
respect to factors underpinning property supply over time.
Analysis of this qualitative interview material demonstrated the exact geogra-
phy of demand, which focused on particular streets in a given neighbourhood;
the types of property that dominated within given sub-markets; the inuence of
external information sources on supply and demand in the sector; and the
supply of property to niche markets. In addition, the interviews provided
material that allowed the dynamic analysis of market development, mapping
changes in supply and demand over time. Further testing needs to take place of
these and other methods that speciŽcally address the nature and impact of
student and other demand groups within localised rental markets. Routine,
rigorous market analyses can then begin to inform effective policy evaluation.

Conclusions
This paper has used the example of demand for student housing in the PRS to
explore some of the issues relating to the delineation of local rental markets.
Student demand constitutes a readily recognisable sub-market within a wide
range of groups seeking to rent for a variety of purposes. Having deŽned some
key elements of that niche-market, including its intense concentration geographi-
cally, property type, HEI intervention, student market landlords and the robust
nature of the market, the paper indicated that the impact of such demand in a
given locality will vary substantially depending on the wider characteristics of
the market concerned. The discussion distinguished steady markets, markets
subject to ux, pressurised markets and low demand markets. The paper
concluded that although there is an evident need to understand local variation
in rental markets, little attention has so far been paid to potentially valuable
qualitative research methods, and to analysis that takes into account market
 302 Julie Rugg et al.

changes over time. It would seem that without a clear understanding of how
difference in rental markets can be measured and assessed, the variable impact
of policy on the sector will be very difŽcult to evaluate.

Acknowledgements
This paper is based on research that was funded by the Joseph Rowntree
Foundation, and was begun in January 1999. The Žndings are reported in detail
in Rugg et al., 2000. The authors of this paper express thanks to the funders and
to members of the advisory group on the project. Gratitude is also expressed to
Roger Burrows at the Centre for Housing Policy for his helpful comments, and
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to the anonymous referees.

Correspondence
Julie Rugg, Centre for Housing Policy, University of York, Heslington, York
YO10 5DD, UK. Email: jr10@york.ac.uk

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