A major student accommodation project in Brighton has experienced delays due to what developer Richard Upton describes as a “perfect storm” of challenges, including falling student enrolments and escalating construction expenses. The development, which aims to provide 566 student bedrooms across four blocks on the grounds of Moulsecoomb Place, received planning approval in January 2024 after initial proposals were submitted in 2022.
Market Challenges and Delays
Richard Upton, who leads the Cathedral Group, known for previous successful projects like the Preston Barracks and Circus Street schemes, has expressed concerns that construction is unlikely to commence until at least next year. He stated, “It’s a perfect storm.” The pandemic has significantly affected the student accommodation landscape, with many students now opting for remote learning, resulting in a shift towards commuting to local universities.
Furthermore, the recent implementation of the Building Safety Act has introduced additional regulatory hurdles, which have inflated costs. Upton noted that obtaining planning consent now requires an investment of approximately £2 million, and compliance with the new safety regulations can take an additional year and another £2 million to satisfy.
Declining Student Numbers
According to data from the Higher Education Statistics Agency, the number of international students attending both the University of Brighton and the University of Sussex has seen a sharp decline, dropping from 8,840 in the academic year 2018/19 to 6,865 in 2024/25. The total student population at these universities has also decreased from 39,625 to 34,695 during the same period, coinciding with the closure of the Hastings and Eastbourne campuses.
Upton remarked, “The government has been putting the brake on some international students. One of our oldest and most suitable exports is education. Those brakes are now coming off.” Interestingly, Brighton’s accommodation market has witnessed a temporary surge, as approximately 2,000 students relocated to the city following the closure of the Hastings and Eastbourne campuses, providing some resilience to the Moulsecoomb accommodation sector.
Investor Sentiment and the Future of PBSA
The current environment has led to a slowdown in the purpose-built student accommodation (PBSA) market, making investors more hesitant to commit funds. Nevertheless, Upton remains optimistic about the future of quality student housing developments. He emphasised the importance of focusing on affordability rather than luxury, stating, “Too many developers chased a luxury end, but very few rather than looking at the meat in the market, which is ordinary people and the affordability to their parents. Parents are willing to pay £20 a week extra for their daughter to stay somewhere safe.”
Upton further elaborated on the necessity of providing quality housing at reasonable prices, noting that it could potentially encourage the local housing market to free up homes for families. He pointed out the issue of unregulated Houses in Multiple Occupation (HMOs), where students are often placed in cramped conditions at exorbitant prices. He argued that creating a balanced housing environment is crucial for Brighton’s social fabric, highlighting that homes with gardens are more essential for families than student accommodations in unregulated settings.
Long-Term Perspectives on Investment
In light of the current challenges, Upton stressed the need for a long-term perspective when making significant investments, such as the projected £150 million for the Moulsecoomb project. He acknowledged that market fluctuations can induce anxiety, but even the most challenging data suggests a persistent shortage of student bedrooms. While rents are becoming more affordable, he cautioned that a reduction in new builds would eventually lead to increased costs and further diminish affordability.
Upton remains confident that the Moulsecoomb project is well-positioned within the market, as it is thoughtfully designed and scaled appropriately. He anticipates that rents may begin to rise again in the next two to three years, suggesting that investors should remain vigilant for the right opportunity to capitalise on upcoming trends. Using a surfing analogy, he stated, “You are there on your board waiting to catch the next wave.”